LIBRARY 

UNIVERSITY  OF  CALIFORNIA 
DAVIS 


LIBRARY 

OF 
DAVIS 


NATIONAL  SYSTEM 


POLITICAL  ECONOMY, 


BY 


FREDERICK   LIST. 

TRANSLATED  FROM  THE  GERMAN 
BY 

G.  A.  MATILE, 

DOCTOR   OP   CIVIL   LAW;    LATE   PROFESSOR   OF   LAW  AT   NEUFCHATEL J    MEMBER 
OF   THE    AMERICAN   PHILOSOPHICAL    SOCIETY,    ETC. 

INCLUDING  THE  NOTES  OF  THE  FRENCH  TRANSLATION, 
BY 

HENEI  RICHELOT 

Chef  du  Bureau  de  la  Legislation  des  Douanes  Etrangeres  au  Ministers  du  Commerce  de  France ;  Auteur 
de  1'Histoire  de  la  Rgforme  Commerciale  en  Angleterre,  et  de  1'Association  Douaniere  Allemande. 


fnlimimg  dssag  oft 

BY 

STEPHEN  COLWELL. 


PHILADELPHIA: 

J.    B.    LIPPINCOTT    &    CO. 

1856. 

LIBRARY 

UNIVERSITY  OF  CALIFORNIA 
DAVIS 


Entered,  according  to  the  Act  of  Congress,  in  the  year  1856,  by 
J.  B.  LIPPINCOTT   &   CO., 

in  the  Clerk's  Office  of  the  District  Court  of  the  United  States  in  and  for  the 
Eastern  District  of  Pennsylvania. 


PREFACE 

TO  THE  AMERICAN  EDITION. 
(BY  THE  TRANSLATOR.) 


FREDERICK  LIST*  was  born,  the  6th  August,  1789,  at  Reutlingen,  a 
free  city  of  Suabia.  His  early  education  was  incomplete.  At  the 
Classical  School  he  exhibited  so  little  taste  for  its  studies,  that  his 
father  withdrew  him ;  but  as  he  showed  equal  indisposition  to  learn  his 
father's  business,  he  was  subsequently  left  to  shape  his  own  education. 
This  he  did,  however,  to  such  purpose,  that  we  find  him,  in  1816,  hold 
ing  an  appointment  in  the  Central  Administration  of  Wurtemberg,  in 
which  he  justified  the  confidence  placed  in  him  by  a  distinguished 
statesman,  the  Minister  Wangenheim,  who  offered  his  young  assistant, 
in  the  following  year,  the  chair  of  Political  Economy,  in  the  University 
of  Tubingen.  List  accepted  this  position. 

He  tells  us  in  the  Preface  to  his  National  System,  that  the  principle 
of  free  trade  was  one  of  the  first  encountered  in  his  new  career.     "  It 
seemed  to  me  at  first  reasonable ;  but  gradually  I  satisfied  myself  that 
the  whole  doctrine  was  applicable  and  sound  only  when  adopted  by  all  [ 
nations.     Thus  I  was  led  to  the  idea  of  nationality ;  I  found  that  the  i 
theorists   kept    always    in  view   mankind    and    man,   never   separate* 
nations.     It  became  then  obvious  to  me,  that  between  two  advanced 
countries,  a  free  competition  must  necessarily  be  advantageous  to  both,  if  L 
they  were  upon  the  same  level  of  industrial  progress ;  and  that  a  nation,  * 

*  The  sources  of  this  biography  are  —  1st.  List's  life,  by  Professor  Hausser, 
of  Heidelberg,  who  was  commissioned  by  our  Author's  family  with  the  collec 
tion  and  publication  of  List's  works,  and  who  has  fulfilled  his  task  with  zeal  and 
talent.  2d.  List's  biography,  written  by  his  French  translator,  Henry  Eiche- 
lot.  3d.  The  article  in  the  Dictionnaire  de  V Economic  Politique,  (Paris,  1853). 
4th.  The  National  System  itself.  5th.  We  have  made  free  use  of  the  Author's 
Preface,  which  is  therefore  omitted  in  the  translation. 

I  cannot  omit  here  to  express  my  obligations,  in  all  that  concerns  this  publica 
tion,  to  Stephen  Colwell,  who  has  so  kindly  consented  to  be  its  Editor,  and  to 
point  out  some  of  my  errors  in  a  language  with  which  I  am  yet  far  from  being 

(v) 


vi  PREFACE. 

unhappily  far  behind  as  to  industry,  commerce  and  navigation,  and  which 
possessed  all  the  material  and  moral  resources  for  its  development,  must 
above  every  thing  put  forth  all  its  strength  to  sustain  a  struggle  with 
nations  already  in  advance." 

In  his  chair,  as  well  as  in  the  periodicals,  he  advocated  political  re 
forms  designed  to  promote  the  welfare  of  his  country ;  but  in  his  earnest 
advocacy,  he  failed  to  preserve  a  desirable  caution  and  prudence ;  hence, 
he  was  soon  exposed  to  persecutions,  the  result  of  which  rendered  him 
restless  and  unhappy.  This  condition  accompanied  him  almost  all  his 
life ;  he  had  in  many  respects  outstripped  his  age,  and  conscious  of  his 
genius,  he  could  not  easily  bear  to  be  trammelled  in  the  range  of  his 
ideas.  The  reader  of  his  book  must  be  struck  with  his  rapidity  of 
thought,  and  the  sagacity  of  his  views. 

Whilst  in  Tubingen,  he  conceived  the  idea  of  establishing  an  associa 
tion  of  merchants  and  manufacturers,  the  aim  of  which  was  to  obtain 
the  suppression  of  customs  on  the  interior  boundaries  of  the  German 
States  'j  then,  by  the  aid  of  a  common  system  of  customs  on  the  exterior 
frontiers  of  Germany,  to  attain  the  same  industrial  and  commercial  de 
velopment  which  other  nations  had  succeeded  in  obtaining  by  their 
commercial  policy. 

A  change  in  the  ministry,  by  which  his  friends  ceased  to  be  in  power, 
induced  him  to  tender  his  resignation  as  a  professor.  He  withdrew 
to  private  life,  and  devoted  his  leisure  to  various  literary  works,  espe 
cially  to  an  annotated  translation  of  J.  B.  Say's  Political  Economy. 
Important  events  induced  him  to  hasten  from  these  labors  to  Paris. 
There,  in  1823,  he  became  acquainted  with  Lafayette,  who  offered 
•to  take  him  to  America  and  to  befriend  him.  The  love  of  List  for  his 
country  prevented  him  at  that  time  from  accepting  a  proposition  so 
nattering;  but  when  he  found  that  he  could  no  longer  be  of  any  service 
to  it,  he  determined,  in  1825,  to  join  Lafayette  in  America.  List  found 
the  General  in  Philadelphia,  and  received  from  him  a  most  kind  recep- 

familiar.  Mr.  Colwell  first  turned  my  attention  to  the  works  of  Frederick 
List,  and  recommended  to  me  the  translation  of  the  "National  System  of  Po 
litical  Economy,"  as  a  work  which  had  been  received  with  immense  favor  in 
Germany,  and  which,  for  its  real  merit  and  adaptation  to  our  country,  deserved 
like  success  here.  My  frequent  conferences  with  Mr.  Colwell  first  gave  me  a 
taste  for  Economical  studies,  which  free  access  to  his  library,  the  largest  on  the 
subject  of  Political  Economy  I  have  seen  in  Europe  or  America,  enabled  me  to 
gratify,  to  the  full  extent  of  all  my  leisure  hours.  This  library  contains  many 
thousand  volumes  in  the  various  departments  of  Social  Economy,  including 
works  in  the  French,  Italian,  German,  Spanish,  and  Latin  languages.  . 


PREFACE.  Vil 

tion.  At  Lafayette's  special  request,  List  accompanied  him  on  his 
triumphal  tour  among  the  American  people,  and  on  that  occasion  he 
became  acquainted  with  many  of  the  most  distinguished  statesmen  in 
the  United  States. 

After  much  inquiry  and  examination,  List  became  an  inhabitant 
of  Pennsylvania,  purchased  a  farm  near  Harrisburg,  and  lived  there  with 
his  family;  but  fever  and  other  circumstances  prevented  success  in  hirf 
agricultural  labors.  He  went  thence  to  Reading,  where  he  published  a 
German  paper.  At  the  request  of  Charles  J.  Ingersoll,  President  of 
the  Pennsylvanian  Society  for  the  Advancement  of  Manufactures  and  Arts, 
List  published,  in  the  National  Zeitung,  a  series  of  letters,  on  the  subject 
of  free  trade,  which  were  republished  in  very  many  journals,  and  to  the 
number  of  several  thousand  copies,  in  the  form  of  pamphlets,  by  the  above 
named  Society,  with  the  title :  Outlines  of  a  New  System  of  Political 
Economy.  These  letters  were  favorably  received  by  the  most  eminent 
men  of  the  country,  such  as  James  Madison,  Henry  Clay,  Edward  Liv 
ingston,  etc.  That  Society  expressed  its  thanks  to  List  for  the  publica 
tion  of  his  Outlines  of  a  System,  of  American  Political  Economy,  by 
which  he  had  rendered  a  real  service  to  the  United  States.  The  Society 
invited  List  to  prepare  two  other  works ;  the  one,  elaborate  and  profound, 
in  which  his  theory  was  to  be  fully  developed ;  the  other,  popular,  and 
fitted  to  become  a  school-book.  The  Society  undertook  on  its  part  to 
use  every  effort  to  give  a  wide  circulation  to  these  works,  and  invited 
the  Legislatures  of  the  States  interested  in  the  American  system  to  follow 
its  example. 

From  that  time  List  gave  himself  up  with  ardor  to  the  preparation 
of  a  work  on  Political  Economy,  of  which  he  had  completed  the  Intro 
duction,  when  his  labors  were  arrested  by  a  fortunate  occurrence. 

This  happy  event  was  the  discovery  by  List  of  the  rich  coal-measures 
since  known  as  the  Tamaqua  mines.  A  company  with  a  capital  of 
$700,000  was  formed ;  the  mines  were  opened ;  and  to  bring  them 
into  communication  with  the  Schuylkill  Canal,  a  railroad  from  Tamaqua 
to  Port  Clinton  was  projected  by  List.  The  business  soon  promised  to 
be  highly  successful,  and  our  Author's  cares  seemed  to  be  at  an  end. 

With  more  prosperous  circumstances,  List  experienced  the  desire  of 
revisiting  his  native  country.  Germany  was  at  the  bottom  of  all  his 
plans.  In  the  solitude  of  the  Blue  Mountains  he  dreamed  of  a  network 
of  railroads  in  a  German  Union.  He  left  America  in  1830,  before  the 
completion  of  the  Tamaqua  Railroad,  undertaken  at  his  suggestion. 

Upon  leaving,  President  Jackson  gave  him  a  mission  in  reference  to 


viii  PREFACE. 

* 

the  commercial  relations  of  the  United  States  with  France,  and  appointed 
him  also  American  Consul  for  Hamburg. 

Soon  after  his  arrival  at  Paris,  List  opened  a  communication  with 
several  journals,  and  became  actively  engaged  in  discussing  economical 
and  commercial  reforms  in  France.  He  resigned  his  Consulship, 
returned  to  America  in  1831  to  give  an  account  of  his  mission,  and 
re-embarked  for  Europe  in  1832  with  a  fortune,  regarded  by  him  as  an  in 
dependence,  and  with  the  honorary  title  of  United  States  Consul  for 
Leipzig.  He  began  at  once  to  disseminate  his  favorite  idea  of 
a  network  of  railroads  in  Germany.  But  a  little  time,  however,  had 
elapsed  when,  upon  his  return  from  one  of  his  frequent  excursions,  he 
received  the  intelligence  that  he  was  almost  wholly  ruined  by  a  financial 
revulsion  in  the  United  States. 

He  again  left  Germany  for  Paris,  and  betook  himself  anew  to  the 
composition  of  his  National  System :  but  his  restlessness  soon  carried 
him  back  to  Germany.  "I  left  France,"  he  somewhere  remarks, 
"  because  the  French  take  no  pleasure  in  anything  but  war  and  theatres." 

His  National  System  appeared  in  1841,  and  its  success  was  immense. 
He  afterwards  edited  the  Zoll-vereins  Blatt,  a  periodical  established  at  his 
instance  in  1843  by  Baron  Cotta,  in  which  he  exhibited  remarkable 
talent  as  a  journalist.  Without  any  official  situation,  without  title  or 
fortune,  though  his  doctrines  were  attacked  upon  every  side,  he  became 
a  prominent  man  by  the  single  prestige  of  his  talent  and  character. 

The  dispatches  of  the  English  ministers  on  the  continent  signalized 
him  to  the  London  Cabinet  as  a  dangerous  enemy,  on  account  of  his 
endeavoring  to  rescue  his  country  completely  from  the  manufacturing 
monopoly  of  England.  List  denied  positively  that  he  harbored  any 
hatred  against  England  j  for  he  acknowledged  that  by  attempting  to 
reach  manufacturing  and  commercial  supremacy  she  had  mightily  con 
tributed  to  increase  the  productive  power  of  mankind ;  but  what  he 
detested  with  all  his  heart,  was  that  grasping  temper  of  England  which 
induces  her  to  covet  all  the  world  for  a  market,  which  scarce  allows 
any  other  nation  to  rise  above  dependence,  and  asks  Germany  to  swallow 
the  potion  manufactured  by  her  cupidity  as  a  product  of  science  and 
philanthropy. 

He  had  reached  the  climax  of  his  influence,  when,  at  the  age  of 
nearly  sixty,  he  wrote  to  a  friend  that,  afflicted  with  infirmities,  he 
looked  to  the  future  with  anxiety,  and,  that  if  he  was  strong  enough, 
he  would  for  the  third  time  visit  America,  whither  his  friends  strongly 
invited  him. 


PREFACE.  ix 

In  1846,  the  league  and  free  trade  triumphed  in  England.  List  could 
not  resist  the  desire  of  then  visiting  London ;  he  went  there  and  soon 
found  himself  in  communication  with  his  three  chief  adversaries,  Bowring, 
MacGregor,  and  Cobden.  The  coolness  with  which  the  statesmen  of 
England  received  a  paper  which  List  prepared  at  the  instance  of  the 
Prussian  Minister,  on  the  subject  of  an  union  between  England  and 
Germany,  made  his  stay  in  England  far  from  agreeable. 

He  returned  to  Germany  in  failing  health,  and  soon  after  died  at 
Kufstein,  in  the  Tyrol,  on  the  30th  November,  1846,  on  a  journey  un 
dertaken  for  his  health,  and  to  find  some  relief  from  his  sufferings. 
The  alternations  of  fortune  and  misfortune  had  wholly  absorbed 
the  springs  of  that  energetic  and  vigorous,  but  restless  and  feverish 
nature. 

List  enjoys  high  repute  upon  various  grounds — as  a  politician,  a  pro 
moter  of  rail-roads,  and  of  the  Zoll-verein ;  but  chiefly  as  an  economist. 

As  a  politician,  he  was  ever  a  partisan  of  liberal  ideas,  local  liberties, 
and  a  persevering  antagonist  of  centralization. 

As  a  promoter  of  rail-roads,  few  have  done  more.  The  dis 
covery  of  the  coal-mines  of  Tamaqua,  and  the  construction  of  the  rail 
roads  connected  with  it,  gave  a  vigorous  impulse  to  his  studies  on  public 
economy :  he  says  : — "  I  had  not  hitherto  comprehended  the  importance 
of  ways  of  communication,  except  according  to  the  theory  of  values ;  I 
had  not  noticed  their  results  except  in  their  details,  and  with  regard  to 
the  extension  of  markets,  as  well  as  to  the  diminution  of  the  prices 
of  material  products.  Then  I  commenced  to  consider  them  in  view  of 
the  theory  of  productive  power,  and  in  their  collective  action  as  a 
National  System  of  communications,  consequently  in  relation  to  their 
influence  upon  the  moral  and  political  existence,  upon  the  social  con 
nexions,  the  productive  forces,  and  the  power  of  nations." 

To  whomsoever  may  belong  the  first  idea  of  the  German  Customs- 
Union,  (the  Zoll-verein)  and  many  attribute  it  to  List  himself;  it  may 
be  safely  said  that  no  unofficial  man  contributed  more  to  further  its  pro 
gress  and  secure  its  final  establishment  than  List.  For  these  labors 
Germany  owes  him  a  debt  of  gratitude,  which  the  extraordinary  success 
of  his  writings  shows  a  willingness  to  acknowledge. 

As  an  economist,  he  has  distinguished  himself  by  many  works,  but 
more  especially  by  his  National  System  of  Political  Economy,  published 
with  his  other  writings  in  Stuttgart  and  Tiibingen,  in  1850,  by  Louis 
Haiisser,  Professor  of  History  in  the  University  of  Heidelberg,  a 
friend  of  List's  family.  The  National  System  has  been  annotated  and 


X  PREFACE. 

ably  translated  into  French,  and  published  in  Paris,  1851,  by  Henry 
Richelqt,  a  distinguished  economist,  author  of  several  works,  among 
which  is  one  upon  the  "  German  Customs-Union."  *  The  translation  now 
made  from  the  German,  reproduces  rather  the  spirit  than  the  letter 
of  List ;  but  it  is  faithful.  List's  notes  have  been  retained,  as  well  as 
Richelot's,  as  far  at  least  as  they  were  considered  appropriate  to  an 
American  Edition. 

The  grand  characteristic  of  List's  system  is  nationality.  His  edifice 
is  built  upon  the  idea  of  nations  as  they  are.  Contrary  to  the  usual 
course  of  economists,  who  study  how  mankind  can  attain  to  a  condition 
of  well-being,  List  shows  how  a  nation  in  given  circumstances,  can  by 
means  of  agriculture,  manufacturing  industry,  and  commerce,  reach  a 
state  of  prosperity,  civilization  and  power.  He  protests  against  the 
empty  theory  which  overlooks  nationality  and  national  interests;  or 
which,  if  it  considers,  defaces  them  by  cosmopolitical  views.  He  con 
tends  that  the  School,  by  which  term  he  designates  the  disciples  of 
Adam  Smith  and  Say,  erroneously  assumes  a  state  of  things  as  realized 
which  is  yet  to  come ;  for,  admitting  the  existence  of  an  universal  as 
sociation  and  the  certainty  of  perpetual  peace,  we  cannot  extract  from 
such  a  false  hypothesis  the  doctrine  of  free  trade,  as  a  principle  or 
an  economical  theory.  List  insists  upon  the  necessity  of  acknowledging 
that  the  nation  intervenes  between  man  and  mankind,  with  its  par 
ticular  language,  its  literature,  its  history,  its  habits,  its  laws,  its  insti 
tutions,  its  right  to  existence,  to  independence,  to  progress,  and  to  a 
distinct  territory;  in  a  word,  its  personality,  and  all  the  rights  and 
duties  it  involves. 

Thus  nationality  is  the  ruling  idea  of  the  book ;  but  with  his  vigo 
rous  mind  and  clear  intelligence,  he  enlarges  it  until  it  comprehends 
every  topic  of  human  welfare.  Upon  that  idea  is  based  his  National 
System  of  Political  Economy.  In  Political  Economy  he  includes  that 
part  of  science  which  treats  of  international  commerce.  It  is  this  very 

*  If  this  volume  falls  into  the  hands  of  Mr.  Henry  Richelot,  whom  I  have 
the  pleasure  of  knowing  only  through  his  writings,  I  take  this  means  of  in 
forming  him  that  the  ire  of  Blanqui  is  not  unknown  to  me,  and  that,  as  a 
translator,  I  am  quite  willing  to  share  with  him,  and  our  common  original, 
all  the  fury  of  criticisms  inspired  by  wounded  pride.  The  extremely  bad  taste 
which  pervades  Blanqui's  article,  greatly  surprised  me  and  others.  It  deserves 
signal  rebuke :  and  I  felt  disposed,  distant  from  the  scene  as  I  am,  to  make  some 
reprisals,  but  I  soon  learned  that  he  was  no  more.  —  Requicscat  in  pace. 


PREFACE.  XI 

idea  of  nationality  which  leads  him,  who  has  done  so  much  for  commer 
cial  liberty,  to  the  restrictive  system.  With  him,  liberty  is  the  end 
to  which  man  must  tend,  bat  which  cannot  be  reached  at  a  bound,  and 
should  not  be  reached  without  carrying  human  welfare  with  it. 

Restrictions,  he  acknowledges,  impose  at  times  an  inconvenience  in 
the  increased  price  of  commodities ;  but  that  evil  soon  finds  ample  com 
pensation  in  the  durable  increase  of  productive  power;  a  power  much 
more  valuable  than  the  values  it  creates. 

As  to  the  application  of  restrictive  measures,  it  will  be  noted  with 
what  caution  he  proposes  and  would  enforce  them.  They  must  be  em 
ployed,  he  says,  with  discretion,  and  be  reserved  for  important  indus 
tries,  the  success  of  which  is  necessary  to  the  national  welfare;  pro 
tection  must  be  accorded  only  so  far  as  it  is  useful  for  the  industrial 
education  of  a  nation ;  that  end  obtained,  protection  must  cease.  Pro 
tection  is  the  means,  liberty,  the  end. 

List's  idea  has  not  its  source  in  a  theory,  but  in  observation,  in 
history ;  and  this  point  of  view  is  the  right  one.  He  was  so  little  in 
clined  to  make  a  theory,  that  he  was  perplexed  about  the  title  National 
System.  He  would  have  preferred  one  indicating  that  the  conclusions 
to  which  he  had  arrived  were  the  result  of  his  researches  in  the  domain 
of  history.  List  does  not  pretend,  like  the  School,  to  have  furnished 
the  world  with  a  social  panacea,  or  a  new  science. 

We  close  by  a  quotation  from  the  Author's  Preface,  in  which,  after 
having  spoken  of  his  studies  and  travels  in  the  most  important  European 
States,  he  adds : 

"  My  destiny  having  afterwards  again  conducted  me  to  the  United 
States,  I  left  behind  all  my  books ;  they  would  but  lead  me  astray  there. 
The  best  book  on  Political  Economy  in  that  new  country  is  the  volume 
of  life.  There  we  see  solitudes  rapidly  converted  into  rich  and  power 
ful  States.  There  only  have  I  obtained  a  clear  idea  of  the  gradual 
development  of  the  economy  of  a  people.  A  progress,  which  in  Europe 
required  the  lapse  of  centuries,  is  accomplished  there  under  the  eyes  of 
a  single  observer ;  there,  society  is  seen  passing  from  the  savage  state  to 
pastoral  life ;  from  this  condition  to  agriculture ;  and  from  agriculture 
to  manufactures  and  commerce.  There,  one  may  easily  observe  how  the 
rent  of  land  rises  gradually  from  nothing  to  its  highest  range.  There, 
the  plainest  farmer  knows  better  than  the  most  sagacious  of  the  learned 
men  of  the  Old  World  the  means  of  making  agriculture  prosperous,  and 
augmenting  rents;  he  endeavors  to  attract  manufactures  to  his  neigh- 


XII  PREFACE. 

borliood.  There  the  contrasts  between  agricultural  and  manufacturing 
countries  are  exemplified  in  the  most  decided  manner,  and  cause  the 
most  disastrous  revulsions.  Nowhere  are  modes  of  communication  for 
trade  and  travel,  and  their  influence  on  the  moral  and  material  life  of 
the  people,  better  appreciated.  That  book  I  have  read  earnestly  and 
assiduously,  and  lessons  drawn  from  it  I  have  tried  to  compare  and  arrange 
with  the  results  of  my  previous  studies,  experience,  and  reflections." 

He  has  given  us  a  system  which,  however  defective  it  may  still 
appear,  is  at  least  not  founded  upon  a  vague  cosmopolitism,  but  on  the 
nature  of  things,  upon  the  lessons  of  history  and  the  wants  of  nations. 
This  system  offers  a  mode  of  reconciling  theory  with  practice,  and  ren 
ders  Political  Economy  accessible  to  every  cultivated  mind ;  a  science 
which  has  hitherto,  by  its  pompous,  scientific  phraseology,  its  contradic 
tions,  and  its  vicious  terminology,  defied  comprehension  and  resisted 
common  sense. 

GK  A.  MATILE. 


TABLE  OF  CONTENTS. 


THE  TRANSLATOR'S  PREFACE , v 

PRELIMINARY  ESSAY , xvii 

NATIONAL  SYSTEM  OF  POLITICAL  ECONOMY.  —  INTRODUCTION 6LJ 


BOOK  I.  — HISTORY. 

CHAPTER  I. 
Italy 83 

CHAPTER  II. 
Hanse  Towns 90 

CHAPTER  III. 
Flanders  and  Holland. 103 

CHAPTER  IV. 
England 110 

CHAPTER  V. 
in  and  Portugal 129 


CHAPTER  VI. 
France 140 

CHAPTER  VII. 

Germany 147 

(xiii) 


xiv  CONTENTS. 

CHAPTER  VIII. 

Pago 

Russia 160 

CHAPTER  IX. 
United  States  of  North  America - 166 

CHAPTER  X. 
Lessons  from  History 178 

/BOOK  II. —  THEORY. 

CHAPTER  I. 
Political  Economy  and  Cosmopolite  Economy 189 

CHAPTER  II. 

The  Theory  of  Productive  Forces  and  the  Theory  of  Values 208 

CHAPTER  III. 

National  Division  of  Labor  and  the  Association  of  the  Productive 
Forces  of  a  Country 228 

CHAPTER  IV. 
Private  Economy  and  National  Economy 243 

CHAPTER  V. 
Nationality  and  the  Economy  of  a  Nation 262 

CHAPTER  VI. 

The  Economy  of  the  People  and  the  Economy  of  the  State.  —  Political 
Economy  and  National  Economy 281 

CHAPTER  VII. 

Of  Manufacturing  Industry,  and  of  the  Personal,  Social,  and  Political 
Productive  Forces  or  Powers  of  a  Country . , 282 


CONTENTS.  XV 

/ 

CHAPTER  VIII. 

Page 

Manufacturing  Industry  and  the  Natural  Productive  Forces  of  a 
Country 294 

CHAPTER  IX. 

Manufacturing  Industry  and  Instrumental  Forces,  or  the  Material 
Capital  of  a  Country 306 

CHAPTER  X. 
Manufacturing  Industry  and  Agricultural  Interests 316 

CHAPTER  XI. 
Manufacturing  Industry  and  Commerce - 338 

CHAPTER  XII. 

Manufacturing  Industry,  Naval  and  Mercantile  Marine,  and  Coloniza 
tion  350 

.  f 

CHAPTER  XIII. 

Manufacturing  Industry  and  the  Instruments  of  Circulation 353 

CHAPTER  XIV. 
Manufacturing  Industry  and  the  Principle  of  Permanency  and  Progress.  373 

CHAPTER  XV. 

Manufacturing  Industry  and  Stimulants  to  Production  and  Consump 
tion  380 

CHAPTER  XVI. 

Duties  upon  Imports  and  Exports,  considered  as  a  powerful  means  of 
creating  and  strengthening  the  Manufacturing  Industry  of  the 
Country 385 

CHAPTER  XVII. 
Import  Duties  and  the  Reigning  School 394 


CONTENTS, 


BOOK  III. —  SYSTEMS. 

CHAPTER  I. 

^ '  Page 

The  Italian  Economists 408 


CHAPTER  II. 
The  Industrial  System,  improperly  called  the  Mercantile  System 411 

CHAPTER  III. 

The  School  of  the  Physiocrats,  or  the  Agricultural  System 417 

CHAPTER  IV. 

The  System  of  Exchangeable  Value,  improperly  called  by  the  School 
the  Industrial  System.  —  Adam  Smith 420 

CHAPTER  V. 
Continuation  of  the  foregoing  —  J.  B.  Say  and  his  School 426 

/      BOOK  IV.  — PUBLIC  POLICY. 

CHAPTER  I. 

Insular  Supremacy.  —  The  Continental  Powers. —  North  America  and 
France 437 

CHAPTER  II. 
Insular  Supremacy  and  the  German  Customs-Union 458 

CHAPTER  III. 
Continental  Policy 476 

CHAPTER  IV. 
Commercial  Policy  of  Germany 488 


PRELIMINARY  ES 

(BY  THE   AMERICAN  EDITOR.) 


IT  is  known  to  those  conversant  with  the  literature  of  Political 
Economy,  that  very  great  differences  of  opinion  have  existed  not  only 
in  reference  to  the  definitions,  but  to  the  terminology  of  this  science. 
Its  masters  have  not  been  in  harmony  as  to  the  ground  covered,  nor  as 
to  the  special  terms  in  which  its  truths  or  laws  were  to  be  expressed. 
Certain  Authors  have  attained  higher  repute  than  others,  and  the  science 
has  been  taught,  so  far  as  it  has  been  made  a  subject  of  special  instruc 
tion,  chiefly  from  them,  or  abridgments  of  them.  In  the  United 
States  it  has  been  taught  either  directly  from  Smith's  "Wealth  of  Nations 
or  Say's  Political  Economy,  or  from  books  deriving  their  doctrines 
mainly  from  these  two  writers.  The  works  now  extant  expressly  de 
voted  to  this  subject  are  counted  by  hundreds,  and  the  Authors  are  not 
only  many  of  them  of  equal  ability  to  the  two  named,  but  in  not  a  few 
instances  they  are  men  of  larger  capacity,  better  preparation,  and  supe 
rior  advantages.  Some  of  them  are  of  high  authority,  and  so  regarded 
by  the  special  disciples  of  that  School  of  Political  Economy,  of  which 
Adam  Smith  is  the  acknowledged  head,  and  Say  an  authoritative 
exponent. 

A  very  little  attention  to  the  current  of  these  writings  will  satisfy 
any  intelligent  and  candid  inquirer  that  it  is  necessary  to  go  far  beyond 
the  works  of  Smith  and  Say  to  ascertain  what  are  at  present  the  pre 
vailing  opinions  of  professed  political  economists;  and  a  pretty  extensive 
survey  will  be  necessary  to  show  what  is  the  present  condition  of  the 
science. 

The  discordant  views  of  writers,  and  the  want  of  agreement  in  the 
use  of  terms,  early  attracted  the  attention  of  the  leading  writers,  and 
scarcely  a  volume  or  a  tract  appeared  upon  this  topic  in  which  some 
effort  was  not  made  to  harmonize  repugnant  positions,  and  settle  the 


xviii  PRELIMINARY    ESSAY. 

meaning  of  terms.  In  regard  to  the  latter  difficulty,  an  elaborate  effort 
was  made  in  1827,  by  ARCHBISHOP  WHATELEY,*  in  the  Appendix  to 
his  work  on  Logic.  He  remarks  that  "  the  terms  of  this  science  are 
drawn  from  common  discourse,  and  seldom  carefully  defined  by  the 
writers  wht>  employ  them ;  hardly  one  of  them  has  any  settled  or  inva 
riable  meaning,  and  their  ambiguities  are  perpetually  overlooked."  The 
words  to  which  he  refers  are  Value,  Wealth,  Labor,  Capital,  Rent,  Wages, 
Profits.  Under  each  of  these  words  he  places  the  definitions  of  various 
writers,  differing  so  widely  that  it  seems  strange  a  science  could  hold 
together  cemented  by  such  phraseology.  The  authors  to  whom  he 
refers  are  Adam  Smith,  J.  B.  Say,  Ricardo,  Malthus,  Storch,  Sismondi, 
Mill,  Torrens,  McCulloch;  .and  among  these  veterans  in  the  science 
he  finds  occasion  for  this  s'pecial  effort  to  settle  the  meaning  of  the  im 
portant  terms  above  mentioned.  Archbishop  Whateley  was  dissatisfied 
even  with  the  najae  Political  Economy,  and  proposed  CATALLACTICS  as 
better  designating  the  nature  of  the  science.  One  work  upon  the 
subject,  published  in  1842,  with  the  pseudonim  of  Patrick  Plough,  has 
that  title. 

In  the  same  year,  1827,  T.  R.  MALTHUS,  author  of  the  work  on 
Population,  published  "  Definitions  of  Political  Economy,  preceded  by 
the  rules  which  ought  to  guide  political  economists  in  the  definition  and 
use  of  their  terms,  with  remarks  on  the  deviation  from  these  rules  in 
their  writings."  "  The  differences  of  opinion  among  political  economists 
have  of  late  been  a  frequent  subject  of  complaint,"  is  the  remark  with 
which  he  commences  his  Preface ;  and  the  work  to  which  he  addresses 
himself  in  the  volume,  is  an  examination  of  the  definitions  of  the 
French  economists,  of  Adam  Smith,  J.  B.  Say,  Ricardo,  James  Mill, 
McCulloch,  and  Bailey.  That  the  criticism  bestowed  by  Malthus  on 
these  eminent  writers  is  not  yet  out  of  season,  and  that  the  occasion  for 
it  has  not  passed  away  in  twenty-five  years,  is  shown  by  the  appearance 
of  a  new  edition  in  London,  in  1853,  with  notes  by  John  Cazenove. 

"  The  Logic  of  Political  Economy,  by  Thomas  De  Quincy,"  published 
in  London,  1844,  was  written  expressly  to  correct  some  errors  in  the 
logic  and  terminology  of  the  science.")"  In  his  estimation  :  — 

"  Political  Economy  does  not  advance.  Since  the  revolution  effected  in 
that  science  by  Ricardo,  (1817),  upon  the  whole  it  has  been  stationary. 

*  Archbishop  Whateley  was,  for  some  time,  Professor  of  Political  Economy 
in  the  University' of  Dublin. 

f  McCulloch  pronounces  this  "  a  very  clever  work,"  but  complains  of  it  as 
overlaid  with  the  formula  of  logic. 


PRELIMINARY    ESSAY.  xx 

But  why  ?  It  has  always  been  my  own  conviction  that  the  reason  lies  in 
the  laxity  of  some,  amongst  the  distinctions  which  are  elementary  to  the 
science.  For  example,  that  one  desperate  enormity  of  vicious  logic  which 
takes  place  in  the  ordinary  application  to  price  of  the  relation  between 
supply  and  demand,  has  ruined  more  arguments  dispersed  through  speeches* 
books,  journals,  than  a  long  life  could  fully  expose.  Let  us  judge  by 
analogy  drawn  from  Mathematics.  If  it  were  possible  that  but  three  ele 
mentary  definitions,  or  axioms,  or  postulates,  should  be  liable  to  contro 
versy  and  to  a  precarious  use,  (a  use  dependent  upon  petition,  momentary 
consent),  what  would  follow  ?  Simply  this,  that  the  whole  vast  aerial  syn 
thesis  of  that  science  at  present  towering  upwards  towards  infinity,  would 
exhibit  an  edifice  eternally,  perhaps,  renewing  itself  by  parts,  but  eternally 
tottering  in  some  parts,  and  in  other  parts  mouldering  eternally  into  ruins." 
After  another  illustration  from  the  science  of  Astronomy,  the  author  pro 
ceeds: — "  Such,  even  to  this  moment,  as  to  its  practical  applications,  is  the 
science  of  Political  Economy.  Nothing  can  be  postulated  ;  nothing  can  be 
demonstrated." 

The  whole  work  consists  of  an  acute  examination  of  the  errors  of 
Political  Economy  so  far  as  they  come  within  the  range  of  his  object. 
He  devoted  himself  specially  to  the  vindication  of  Ricardo. 

Another  effort  to  define  this  science,  worthy  of  special  mention,  is 
that  of  JOHN  STUART  MILL,  whose  "  Essays  on  some  unsettled  questions 
of  Political  Economy"  appeared  in  1844.*  They  are  the  more  worthy 
of  attention,  as  Mr.  Mill  was  not  only  an  eminent  Political  Economist, 
but  skilled  in  logic  and  precise  in  language. 

He  excuses  the  want  of  good  definitions  by  saying  that  many  of  the 
acknowledged  sciences  are  deficient  in  this  respect,  and  that  good  defini 
tions  are  among  the  last  things  to  be  looked  for  in  the  march  of  a  science, 
"  first  principles  being,  in  fact,  last  principles." 

He  gives  the  rationale  of  the  distinction  between  physical  and  moral 
science : 

"  Everything,"  he  says,  "  which  can  possibly  happen  in  which  man  and 
external  things  are  jointly  concerned,  results  from  the  joint  operation  of  a 

*  Mr.  Mill  is  the  well-known  author  of  A  System  of  Logic,  Rationative  and 
Inductive,  in  two  volumes,  8vo.,  of  very  high  repute  and  acknowledged  merit, 
as  a  work  on  Logic.  His  sympathies,  however,  with  the  infidel  philosophy  of 
Comte  are  as  visible  as  objectionable.  He  is  also  the  author  of  the  last  great 
•work  on  Political  Economy  which  has  appeared  in  the  English  language.  It  is 
in  two  volumes,  8vo.,  with  the  title,  Principles  of  Political  Economy  with  some  of 
their  Applications  to  Social  Philosophy.  Third  English  Edition,  1852.  This  work 
will  be  further  noticed  in  the  progress  of  these  preliminary  remarks. 


XX  PRELIMINARY    ESSAY. 

law  or  laws  of  matter  and  a  law  or  laws  of  the  human  mind.  Thus  the 
production  of  corn  by  human  labor  is  the  result  of  a  law  of  mind  and  many 
laws  of  matter."  "  The  laws  of  the  production  of  the  objects  which  consti 
tute  wealth  are  the  subject  matter  both  of  Political  Economy  and  of  almost 
all  the  physical  sciences :  such  as  are  purely  laws  of  matter  belong  to  phy 
sical  science  exclusively.  Such  of  them  as  are  laws  of  the  human  mind,  and 
no  others,  belong  to  Political  Economy,  which  finally  sums  up  the  result  of 
both  combined."  "Political  Economy  presupposes  all  the  physical  sciences ; 
it  takes  for  granted  all  such  of  the  truths  of  those  sciences  as  are  concerned 
in  production.  It  then  inquires  what  are  the  phenomena  of  mind  concerned 
in  production  and  distribution ;  it  borrows  from  the  pure  science  of  mind 
the  laws  of  those  phenomena,  and  inquires  what  effects  follow  from  these 
mental  laws  acting  in  concurrence  with  those  physical  ones." 

Upon  these  considerations  he  furnishes  the  following  definition  of  Po 
litical  Economy : 

"The  science  which  treats  of  the  production  and  distribution  of 
wealth  so  fur  as  they  depend  upon  the  laws  of  human  nature."  "  Or 
thus :  The  science  relating  to  the  moral  or  psychological  laws  of  the 
production  and  distribution  of  wealth."  The  Essay  continues  to  illus 
trate  the  relations  of  mental  science  with  Political  Economy,  and  then 
proceeds : 

44  Pure  mental  philosophy,  therefore,  is  an  essential  part  or  preliminary 
of  political  philosophy.  The  science  of  social  economy  embraces  every 
part  of  man's  nature  in  so  far  as  influencing  the  conduct  or  condition  of 
man  in  society."  "  It  does  not  treat  of  the  whole  of  man's  nature  as  modi 
fied  by  the  social  state,  nor  of  the  whole  conduct  of  man  in  society.  It 
is  concerned  with  him  solely  as  a  being  who  desires  to  possess  wealth,  and 
who  is  capable  of  judging  of  the  comparative  efficacy  of  means  for  obtain 
ing  that  end."  After  remarking  at  some  length  on  the  mixed  motives 
which  govern  men  in  the  affairs  of  life,  he  says :  "  But  there  are  also  cer 
tain  departments  of  human  affairs  in  which  the  acquisition  of  wealth  is  the 
main  and  acknowledged  end.  It  is  only  of  these  that  Political  Economy 
takes  notice.  The  manner  in  which  it  necessarily  proceeds  is  that  of 
treating  the  main  and  acknowledged  end  as  if  it  were  the  sole  end."  The 
author  then  arrives  at  another  definition,  which,  in  his  view,  "  seems  to  be 
complete :"  "  The  science  which  traces  the  laws  of  such  of  the  phenomena 
of  society  as  arise  from  the  combined  operations  of  mankind  fur  the  pro 
duction  of  wealth  in  so  far  as  those  phenomena  are  not  modified  by  the 
pursuit  of  any  other  object."—  (pp.  130  to  140.) 

This  highly  elaborated  definition  of  J.  S.  Mill,  drawn  up  after  having 
freely  admitted  the  pressure  and  full  relation  to  the  subject  of  its  moral 
aspects,  is  under  the  cloud  of  seeming,  if  not  to  reject,  at  least  to  dis- 


PRELIMINARY    ESSAY.     -  Xxi 

pense  with  all  moral  considerations.  One  of  his  preliminary  definitions 
was,  "The  science  relating  to  the  moral  or  psychological  laws  of  the 
production  and  distribution  of  wealth."  It  cannot  but  be  noted  that  the 
final  definition  is  of  a  very  different  tenor,  and  especially  when  taken 
with  the  principle,  that  for  the  purposes  of  the  science  the  "  acknow 
ledged  end"  is  to  be  regarded  "  as  the  sole  end."  We  cannot  but  think 
that  the  author  of  these  two  definitions  realized  in  the  progress  of  his 
Essay,  that  the  science  of  Political  Economy,  as  received  by  himself  and 
by  many  of  the  School  of  Adam  Smith  and  J.  B.  Say,  could  not  logically 
or  consistently  include  any  considerations  of  morality,  humanity,  or 
religion. 

He  remarks  that  it  may  be  thought  by  some  that  his  attempt  to 
frame  a  stricter  definition  of  Political  Economy  than  those  commonly 
received,  can  be  of  little  use.  "  We  think  otherwise,  and  for  this  rea 
son,  that  with  the  consideration  of  the  definition  of  a  science  is  insepa 
rably  connected  that  of  the  philosophic  method  of  the  science." 
"  Where  differences  of  principle  exist  as  distinguished  from  differences 
of  matter  of  fact  or  detail,  the  cause  will  be  found  to  be  a  difference  in 
the  conception  of  the  philosophic  method  of  the  science."  After  ex 
plaining,  at  length,  how  such  differences  lead  men  astray,  and  how  they 
involve  the  old  feud  between  men  of  theory  and  men  of  practice,  he 
says :  "  In  the  definition  which  we  have  attempted  to  frame  of  the 
science  of  Political  Economy,  we  have  characterized  it  as  essentially  an 
abstract  science,  and  its  method  as  the  a  priori."  "It  reasons,  and  as 
we  contend,  must  necessarily  reason  from  assumptions,  not  from  facts." 
"The  conclusions  of  Political  Economy,  consequently,  like  those  of 
geometry,  are  only  true  as  the  common  phrase  is  in  the  abstract,  that 
is,  they  are  only  true  under  certain  suppositions,  in  which  none  but 
general  causes  —  causes  common  to  the  whole  class  of  cases  under  con 
sideration  —  are  taken  into  the  account."  "  That  which  is  true  in  the 
abstract  is  always  true  in  the  concrete,  with  proper  allowances"  (145.) 

"  It  is  in  vain  to  hope  that  truth  can  be  arrived  at  either  in  Political 
Economy  or  in  any  other  department  of  the  social  science,  while  we 
look  at  the  facts  in  the  concrete  clothed  in  all  the  complexity  with  which 
nature  has  surrounded  them,  and  endeavor  to  elicit  a  general  law  by  a 
process  of  induction  from  a  comparison  of  details;  there  remains  no 
other  method  than  the  a  priori  one,  or  that  of  abstract  speculation." 

He  then  proceeds  to  point  out  how  this  science  is  applied :  "  When 
the  principles  of  Political  Economy  are  to  be  applied  to  a  particular  case, 
then  it  is  necessary  to  take  into  account  all  the  circumstances  of  that 


XX11  PRELIMINARY    ESSAY. 

case,"  and  ascertain  by  examination  what  are  the  "disturbing  causes." 
The  difficulty  of  appreciating  these  disturbing  causes,  and  of  ascertain 
ing  whether  the  inquirer  possesses  full  knowledge  of  them,  "  constitutes 
the  only  uncertainty  of  Political  Economy."  He  concludes  that  portion 
of  his  Essay  by  saying,  that  "  the  mere  Political  Economist,  he  who 
has  studied  no  other  science  but  Political  Economy,  if  he  attempt  to 
apply  his  science  to  practice  will  fail."  Political  Economy  is  not,  then, 
according  to  Mill,  a  mere  collection  of  laws  by  which  men  are  to  be 
governed  in  the  affairs  of  life,  but  a  collection  of  the  truths  or  laws  of 
abstract  science  intended  for  the  information  of  practical  men.  The  scien 
tific  political  economist  "  stands  in  the  same  relation  to  the  legislator  as 
the  mere  geographer  stands  to  the  navigator,  telling  him  the  latitude  and 
longitude  of  all  sorts  of  places,  but  not  how  to  find  whereabout  he  him 
self  is  sailing,"  and  we  may  add,  not  pointing  out  where  he  is  to  sail 
nor  the  rocks  and  dangers  in  his  track.  He  recommends  to  the  mere 
economist  "  extreme  modesty"  in  his  opinions  on  practical  politics,  and 
in  the  practical  applications  of  his  doctrines  to  existing  circumstances. 
—  (pp.  140  to  155.) 

We  are  indebted  to  another  great  authority  for  a  special  effort  to  state 
the  progress  of  Political  Economy,  and  to  furnish  a  definition  —  N.  W. 
SENIOR,  Professor  of  the  Science  in  the  University  of  Oxford.  One 
of  his  lectures  is  specially  devoted  to  "  the  causes  that  have  retarded 
the  progress  of  Political  Economy."  *  After  some  preliminary  remarks, 
he  puts  the  question  :  — 

"  Has  the  the  progress  of  Political  Economy  been  in  proportion  to  the 
ardor  with  which  it  has  been  urged  ?"  He  answers,  "  No :  After  so  much 
and  so  long  continued  discussion,  we  might  have  hoped  that  its  limits 
would  have  been  accurately  laid  down,  its  terms  defined,  and  its  general 
principles  admitted.  It  is  unnecessary  to  prove  formally  that  this  is  not 
the  case.  Every  one  is  aware  that  Political  Economy  is  in  a  state  of  im 
perfect  development,  —  I  will  not  say  characteristic  of  infancy,  but  cer 
tainly  very  far  from  maturity.  We  seldom  hear  its  principles  made  the 
subject  of  conversation,  without  perceiving  that  each  interlocutor  has  his 
own  theory  as  to  the  object  to  which  the  inquiries  of  a  political  economist 
ought  to  be  directed,  and  the  mode  in  which  they  ought  to  be  pursued. 
When  we  read  the  most  eminent  of  the  recent  writers  on  the  subject,  we 
find  them  chiefly  engaged  in  controversy.  Instead  of  being  able  to  use  the 
works  of  his  fellow-laborers,  every  economist  begins  by  demolition,  arid 
erects  an  edifice,  resting  perhaps,  in  a  great  measure,  on  the  same  founda- 

*  "  Four  Introductory  Lectures  on  Political  Economy,  delivered  before  the 
University  of  Oxford,"  London,  1852.  —  (p.  18.) 


PRELIMINARY    ESSAY.  Xxiii 

tions,  but  differing  from  all  that  has  preceded  it  in  form  and  arrange 
ment/'*—  (p.  11.) 

After  discussing  the  subject  at  length,  Senior  decides  that  Political 
Economy  is  a  mental,  not  a  physical  study  —  that  it  is  concerned  with 
the  laws  of  mind,  not  with  the  laws  of  matter.  What  the  political 
economist  "reserves  to  himself,"  according  to  him,  "is  to  explain  the 
laws  of  mind  which  decide  in  what  proportions  the  produce,  or  the 
value  of  the  produce,  is  divided  between  the  three  classes  by  whose 
concurrence  it  has  been  obtained."  (p.  34.)  Having  thus  stated  that 
Political  Economy,  as  a  subject,  belonged  to  the  department  of  mind, 
he  proceeds  to  the  question  whether  it  is  a  science  or  an  art.  "  If  Po 
litical  Economy  is  to  be  treated  as  a  science,  it  may  be  defined  as  "  the 
science  which  states  the  laws  regulating  the  production  and  distribution 
of  wealth,  so  far  as  they  depend  on  the  action  of  the  human  mind." 

"  If  it  be  treated  as  an  art,  it  may  be  defined  as  ( the  art  which  points 
out  the  institutions  and  habits  most  conducive  to  the  production  and 
accumulation  of  wealth/  Or,  if  the  teacher  venture  to  take  a  wider 
view,  as  the  art  which  points  out  the  institutions  and  habits  most  con 
ducive  to  that  production,  accumulation,  and  distribution  of  wealth, 
which  is  most  favorable  to  the  happiness  of  mankind."  —  (p.  36.) 

There  is  a  degree  of  frankness  implied  in  these  definitions  which  does 
honor  to  Senior  as  a  professed  political  economist :  in  such  hands,  the 
subject,  whether  a  science  or  an  art,  is  more  likely  to  make  progress 
than  in  those  who  regard  it  as  already  nearly,  if  not  altogether,  perfect. 
The  reader  will  bear  in  mind,  that  our  chief  object  in  these  remarks  is 
to  ascertain  how  far  Political  Economy,  in  its  present  state,  is  entitled, 
whether  as  a  science  or  an  art,  to  state  truths  to  enlighten,  or  rules  to 
govern  statesmen.  It  is  quite  certain,  that  so  long  as  it  is  undecided 
whether  it  is  a  science  or  an  art,  its  teachings  must  be  regarded  with 
much  distrust  in  what  regards  public  administration  or  the  actual  busi 
ness  of  life.  After  noticing  the  Mercantile  System  and  its  errors,  the 
works  of  Sir  James  Stewart,  who  blends  art  and  science  together  to  the 
confusion  of  both ;  the  "  Formation  and  Distribution  of  Riches"  bjX 
Turgot,  which  is  a  purely  scientific  treatise ;  the  writings  of  Quesnay 
and  the  Physiocratic  School,  which  treat  it  as  an  art,  Senior  proceeds  to 

*  N.  W.  Senior  is  the  author  of  many  works  upon  Political  Economy,  among  » 
which  is  an  "  Outline  of  the  Science  of  Political  Economy,  4to.,  London,  1836,    ' 
which  is  pronounced  by  J.  R.  McCulloch  to  be  "an  able,  comprehensive,  and 
admirable  Essay."     There   are  few  living  writers    on   the  subject  of  higher 
authority. 


XXIV  PRELIMINARY    ESSAY. 

a  critical  examination  of  the  Wealth  of  Nations.  This  he  regards  as 
a  work  upon  the  art,  for  "  the  scientific  portion  of  his  work  is  merely 
an  introduction  to  that  which  is  practical/'  "  The  English  writers  who 
have  succeeded  Adam  Smith,  have  generally  set  out  by  defining  Po 
litical  Economy  as  a  science,  and  proceeded  to  treat  it  as  an  art."  (45.) 
But  this,  by  Senior's  own  showing,  is  precisely  what  their  master  had 
done  before  them,  for  the  "  scientific  portion"  of  the  "  Wealth  of  Na 
tions"  bears  a  very  small  proportion  to  the  remainder.  An  instance  of 
this  kind  of  definition  is  cited  by  Senior  from  J.  R.  McCulloch,  who 
defines  it  as  a  science,  but  in  stating  its  object,  converts  it  into  an  art. 
James  Mill  confuses  his  treatise  in  the  same  manner.  Ricardo  treats 
the  subject  as  a  science.  "  The  modern  Economists,"  continues  Senior, 
"of  France,  Germany,  Spain,  Italy,  and  America,  so  far  as  I  am  ac 
quainted  with  their  works,  all  treat  Political  Economy  as  an  art." 
(pp.  45-46.)  Their  opinion  seems  to  be  that  Political  Economy  is  a 
branch  of  the  art  of  government,  and  that  its  business  is  to  influence 
the  conduct  of  a  statesman,  rather  than  to  extend  the  knowledge  of  a 
philosopher."  —  (p.  46.) 

It  must  be  obvious,  upon  very  little  reflection,  that  speculations  upon 
Political  Economy  can  be  of  no  great  value  until  it  is  known  whether 
they  state  abstractions  of  science,  or  give  rules  of  conduct.  The 
writer  who  has  not  understood  or  observed  the  distinction  cannot,  with 
safety,  be  trusted  in  either  aspect  of  the  subject,  though  he  may  be 
read  with  advantage  by  any  one  well  versed  in  the  two  departments  and 
able  to  keep  the  distinction  in  view.  "  It  appears,  from  this  hasty 
sketch,  that  the  term  Political  Economy  has  not  yet  acquired  a  definite 
meaning,  and  that  whichever  of  the  three  definitions  I  adopt,  I  shall  be 
free  from  the  accusation  of  having  unduly  extended  or  narrowed  the 
field  of  inquiry."  (p.  46.)  It  is  remarkable,  that  in  this  "  hasty 
sketch/'  no  notice  is  taken  of  J.  B.  Say,  to  whose  Treatise  it  is  no 
doubt  chiefly  owing  that  this  important  question  between  the  science 
and  the  art  of  Political  Economy  has  arisen.  We  shall  refer  to  Say  in 
this  aspect  hereafter. 

"  The  time  I  trust  will  come,  perhaps  within  the  lives  of  some  of 
us,  when  the  outline  of  the  Science  of  Political  Economy,  as  distin 
guished  from  the  art,  will  be  clearly  made  out  and  generally  recognized ; 
when  its  nomenclature  will  be  fixed,  and  its  principles  form  a  part  of 
elementary  instruction.  A  teacher  of  the  art  of  Political  Economy 
will  then  be  able  to  refer  to  the  principles  of  the  science  as  familiar  and 
admitted  truths.  I  scarcely  need  repeat  how  far  this  is  from  being  the 


PKELIMINARY    ESSAY.  XXV 

case  at  present."  (p.  52.)  This  opinion  of  Senior  is  cited  for  the 
benefit  of  many  in  the  United  States  who  have  been  taught  to  regard 
the  science  as  fully  treated  by  Say  and  the  numerous  compends  of  his 
work. 

Senior  pursues  the  discussion  through  another  lecture,  as  to  the  ques 
tion  between  science  or  art,  referring  specially  to  the  work  of  John 
Stuart  Mill  (from  which  we  have  quoted  so  extensively  above),  and 
highly  approving  his  views. 

This  distinction  between  science  and  art,  as  applied  to  Political 
Economy,  has  but  recently  been  made  prominent.  Its  application  has 
revealed  a  fruitful  source  of  error.  The  confusion  consequent  upon  the 
blending  of  theory  and  practice,  science  and  art,  is  complete  and  uni 
versal  throughout  nearly  the  whole  literature  of  Political  Economy. 
Men  of  logical  minds  or  scientific  training  speculated  and  observed 
with  a  view  to  ascertain  abstract  truths  or  the  laws  of  science;  men  of 
active  life  and  a  practical  turn  of  mind,  directed  their  attention  chiefly 
to  the  actual  processes  of  production  and  distribution,  and  many  of 
them  regarded  these  processes  chiefly  from  the  side  of  humanity  and 
religion.  Some  writers  have  mingled  all  these  views  together,  and  there 
has  been  no  limit  to  criticism  and  recrimination,  argument,  contradic 
tion,  and  ridicule,  between  those  who  misunderstood  each  other,  because 
their  aims  were  different,  their  modes  of  thinking  different,  and  because 
they  had  two  distinct  objects  in  their  minds  whilst  they  professed  to  be 
writing  of  one.  This  confusion  of  terms  and  ideas  will  be  very  appa 
rent  as  we  proceed. 

GEORGE  K.  BJCKARDS,  a  successor  of  Senior  in  the  Professorship  of 
Political  Economy  at  Oxford,  delivered  three  lectures  before  the  Uni 
versity  in  1852,  which  were  published  the  same  year.  To  these  we 
resort  for  later  opinions  upon  this  much-vexed  subject.  He  cuts  the 
Gordian  Knot  of  the  distinction  between  science  and  art  with  a  single 
blow  of  his  weapon,  and  says  that  "Political  Economy  forms  at  all 
times  and  in  all  conditions  of  human  advancement,  a  most  important 
branch  of  the  science  of  Government."  —  "All  political  rulers,  indeed, 
whether  they  recognise  the  fact  or  not,  are  ex  necessitate  Political  Econo 
mists.  On  some  principles  of  Economy,  true  or  false,  they  must  needs 
act/'  He  admits  that  Political  Economy  labors  under  a  degree  of  dis 
credit,  and  that  the  prejudices  and  misconceptions  with  respect  to  its 
nature  and  ofiice  which  beset  it  from  the  first,  still  keep  their  hold  upon 
some  otherwise  well-informed  and  cultivated  minds."  In  regard  to  the 
principles  and  oracles  of  Political  Economy,  "  a  considerable  misconcep- 
1 


Xxvi  PRELIMINARY    ESSAY. 

tion  exists,  one  which  repels  many  from  entering  on  the  study,  and  in 
duces  many  more  to  regard  it  with  aversion  or  contempt."  "  It  is  well 
known/ '  he  admits,  "that  Napoleon  Bonaparte,  who  possessed  one  of 
the  most  powerful  understandings  of  modern  times,  entertained  a  rooted 
antipathy  against  Political  Economy.  It  was  a  saying  of  his  that  ' if  an. 
empire  were  made  of  adamant,  the  Economists  could  grind  it  to 
powder/  But  it  is  pretty  evident  in  what  light  Napoleon  really  re 
garded  the  science  which  he  denounced,  and  it  is  the  same  in  which  it 
is  still  regarded  by  a  large  portion  of  the  world.  He  looked  upon  the 
lucubrations  of  economical  writers,  as  he  looked  on  one  of  the  ready- 
made  political  constitutions  of  the  Abbe  Sieyes,  as  an  artificial  creation 
of  speculative  brains.  He  regarded  them  as  a  collection  of  technical 
rules  and  dogmas,  devised  by  ingenious  theorists  and  men  of  the  closet, 
setting  up  to  instruct  the  rulers  of  mankind  how  to  conduct  the  com 
mercial  and  financial  affairs  of  their  governments.  Confident  in  his  own 
political  skill  and  genius,  he  put  aside  what  he  conceived  the  arbitrary 
prescriptions  of  philosophers,  and  branded  the  whole  class  with  the  im 
putation  of  presumptuous  folly." 

"  I  will  not  venture  to  assert  on  behalf  of  the  whole  catalogue  of  eco 
nomical  writers,  at  least  in  this  country,  that  they  have  given  no  color 
or  countenance  to  the  misapprehension  now  referred  to.  An  undue  at 
tachment  to  systems,  an  attempt  to  attain  a  scientific  precision  beyond 
what  the  nature  of  the  subject-matter  admits  of,  a  proneness  to  gene 
ralize  too  hastily,  and  to  lay  down  as  infallible  and  universal,  laws  which 
are  subject  to  perpetual  disturbance  from  causes  beyond  the  sphere  of 
Political  Economy ;  a  reluctance  to  submit  abstract  reasonings  to  the 
correction  of  facts,  and  a  tendency  to  controversies  about  terms,  and 
the  mere  outward  garb  and  nomenclature  of  science, — such  infirmities,  of 
a  kind  not  unfrequently  to  be  recognised  in  other  departments  of  human 
knowledge,  may  have  given  color  to  the  impression  that  political  econo 
mists  care  more  for  system  than  for  facts,  and  are  conversant  with  vague 
abstractions  rather  than  with  the  realities  of  life.  Still  more  might 
this  prejudice  be  countenanced  by  a  defect  which  appears  to  me  even 
more  frequently  characteristic  of  economical  writers.  I  mean  the  omis 
sion  to  refer  constantly  for  appeal  and  for  correction  to  that  primary 
source  of  all  the  conclusions  of  true  Political  Economy,  the  fixed  laws 
of  Providence  exemplified  in  the  constitution  of  man's  nature  and  in 
.  the  fundamental  arrangements  of  society."  —  (Richards' s  Lectures, 
p.  12,  13.) 

Our  object  in  this  preliminary  essay  being  two-fold  —  to  justify  the 


PRELIMINARY    ESSAY.  XXV11 

bringing  forward  a  new  work  on  Political  Economy,  and  to  create  some 
distrust  of  the  teachings  upon  that  subject  which  have  been  most  in 
vogue  in  this  country,  we  might  pause  here  in  the  belief  that  we  had 
attained  our  object. 

But  as  the  future  study  of  Political  Economy  cannot  be  pursued  ad 
vantageously  without  a  still  more  extended  knowledge  of  the  confusion, 
and  want  of  harmony  which  reign  among  its  leading  authorities,  we 
propose  now  to  refer  to  these  and  to  their  appreciation  of  each  other's 
labors.  In  this  brief  notice  we  confine  ourselves  chiefly  to  writers 
of  that  School  which  regards  Adam  Smith  as  its  head.  List  has 
throughout  the  following  work  called  it  simply  THE  SCHOOL,  for  the 
reason  that  no  other  class  of  writers  upon  Political  Economy  makes  pre 
tensions  to  be  the  only  safe  expositors  of  the  subject.  Most  others  who 
regard  Political  Economy  rather  as  an  art,  in  some  of  its  principal  as 
pects  coming  within  the  scope  of  public  administration,  look  upon 
themselves  as  contributing  their  views,  facts,  experience,  and  specula 
tions,  to  elucidate  the  true  policy  of  nations  in  the  matter  of  industry 
and  trade,  and  the  well-being  of  people.  Regarded  from  this  point  of 
view,  all  the  principal  works  upon  Political  Economy  are  valuable  as 
materials  for  study  and  discussion,  and  it  is  only  when  some  of  them 
are  put  forth  as  teachers  of  a  science,  as  the  propounders  of  indisputable 
truths,  to  pass  unquestioned  at  all  times  and  places,  that  it  becomes  ne 
cessary  to  look  carefully  into  their  pretensions.  The  space  at  our  dis 
posal  will  not  permit  an  extended  appreciation  of  the  doctrines  or 
merits  of  the  authors  to  whom  we  shall  refer;  but  as  they  belong  mainly 
to  one  School,  they  may  be  safely  treated  as  good  authority  against 
each  other. 

ADAM  SMITH  is  the  distinguished  man,  by  common  consent,  referred 
to  as  the  Father  of  that  School  which  has  long  claimed  pre-eminence  in 
Political  Economy.  Whatever  ground  there  may  be  for  ascribing  to 
him  this  paternity,  it  is  very  safe  to  say,  that  were  he  to  revisit  the 
world,  he  would  find  it  difficult  to  recognise  his  offspring.  We  prefer 
giving  all  the  honor  of  this  fatherhood  to  J.  B.  Say,  who,  though  he 
may  have  taken  his  inspiration  from  Adam  Smith,  was  certainly  the 
first  to  give  the  doctrines  of  Political  Economy  a  shape  and  degree  of 
consistency  sufficient  to  form  the  rallying  point  of  a  School.  Regarded 
as  a  treatise  upon  industry,  wealth,  and  trade,  and  the  other  subjects  to 
which  it  refers,  and  considering  the  time  at  which  it  appeared,  the 
Wealth  of  Nations  must  be  admitted  to  be  one  of  the  most  successful 
works  of  modern  times.  It  has,  beyond  question,  been  the  chief  stiin- 


XXviii  PRELIMINARY    ESSAY. 

ulus  to  the  extraordinary  discussions  which  have  since  ensued  upon  the 
subjects  of  which  it  treats.  Its  leading  ideas  made  a  great  impression, 
and  have  since  been  the  subjects  of  interminable  discussion ;  but  the 
Wealth  of  Nations,  though  often  referred  to,  is  seldom  studied.  Some 
have  attributed  this  to  the  subject  itself,  and  others  to  its  want  of 
method.  It  has  many  editors  and  commentators  j  it  has  been  analysed 
and  abridged,  and  many  other  modes  have  been  adopted  of  facilitating 
its  study.  It  is,  however,  only  a  text-book  for  Economists,  and  not  a 
work  to  be  read.  We  have  quite  a  circumstantial  account  of  the  dif 
ficulty  of  reading  it  in  the  experience  of  Francis  Horner,  who  rose  in 
the  early  part  of  this  century  to  very  high  repute  as  a  Political  Econo 
mist,  by  his  Parliamentary  career  and  his  contributions  to  the  Edinburgh 
Review.*  He  informs  us  that  he  and  Lord  Seymour  "were  under  the 
necessity  of  suspending  progress  in  the  perusal  of  the  Wealth  of  Na 
tions,  on  account  of  the  insurmountable  difficulties,  obscurities,  and 
embarrassments  in  which  the  reasonings  of  Chapter  V.  are  involved." 
(Memoirs,  Vol.  I.,  p.  163.)  He  and  his  friend  had  engaged  in  a 
regular  and  deliberate  study  of  the  work  thus  given  up.  He  asks 
(Ibid.,  p.  126)  if  "  Smith  did  not  judge  amiss  in  his  premature  attempt 
to  form  a  sort  of  system  upon  the  Wealth  of  Nations,  instead  of  pre 
senting  his  valuable  speculations  to  the  world  under  the  form  of  sepa 
rate  dissertations  ?  As  a  system,  his  work  is  evidently  imperfect,  and 
yet  it  has  so  much  the  air  of  a  system,  that  we  are  apt  to  adopt  his  erro 
neous  opinions,  because  they  figure  in  the  same  fabric  with  approved 
and  important  truths."  In  another  place  he  says,  in  reply  to  a  request 
to  edit  the  Wealth  of  Nations,  "I  should  be  reluctant  to  expose  Smith's 
errors  before  his  work  has  operated  its  full  effect.  We  owe  much  at 
present  to  the  superstitious  worship  of  Smith's  name ;  and  we  must  not 
impair  that  feeling  until  the  victory  is  more  complete.  There  are  few 
practical  errors  in  the  Wealth  of  Nations,  at  least  of  any  great  conse 
quence  ;  and  until  we  can  give  a  correct  and  precise  theory  of  the  nature 
and  origin  of  wealth,  his  popular,  plausible,  and  loose  hypothesis  is  as 
good  for  the  vulgar  as  any  other."  —  (Ibid.,  229.) 

Mr.  Homer's  delicacy  about  exposing  Smith's  errors,  has  had  few 
imitators  since  his  day,  for  seldom  has  any  book  been  more  eulogized  in 
general,  and  more  found  fault  with  in  detail,  than  the  Wealth  of  Na 
tions.  The  great  reputation  of  Smith  has  made  the  Economists,  in  general, 
anxious  to  range  themselves  under  his  wing,  and  from  that  position 

*  He  was  alone,  or  as  some  say,  in  conjunction  with  Huskisson,  the  author 
of  the  celebrated  Bullion  Report  of  1810. 


PRELIMINARY    ESSAY. 

they  have  not  hesitated  to  cut,  and  carve,  and  apply  the  caustic,  until 
there  is  scarcely  an  important  passage  in  the  whole  work  which  some 
one  of  his  friends  has  not  detached  from  his  system  as  wrong,  or  branded 
as  absurd.  It  would  require  volumes  to  specify  the  harsh  treatment 
which  this  work  has  received  from  those  who  still  appealed  to  it  as  the 
fountain  of  their  own  systems. 

The  English  edition  of  the  Wealth  of  Nations,  edited  by  J.  R. 
McCulloch,  and  published  in  1828  and  in  1838,  has  been  pronounced 
by  Blanqui,  UL 'edition  dassique  par  excellence"  It  is  accompanied 
by  a  life  of  the  author,  an  elaborate  introductory  discourse,  notes,  and 
supplemental  dissertations.  The  eulogy  of  Smith  in  the  introductory 
discourse  is  generous  and  full,  warm,  and  positive  j  his  criticisms 
modest  and  few.  It  is  such  an  appreciation  as  leaves  on  the  reader 
a  strong  impression  of  the  value  and  merits  of  the  work.  It  is  when 
he  comes  to  details  in  the  body  of  the  work  that  the  editor  is  impelled 
to  expose  the  errors  of  his  author.  As  it  is  far  beyond  our  power  to 
follow  him  in  this  severe  process,  we  refer  the  reader  to  the  edition  of 
1838,  page  643,  in  the  index  under  the  name  Smith,  where  he  will 
find  specifically  stated  and  referred  to,  nearly  one  hundred  important 
errors,  all  of  which  are  treated  fully  in  the  notes.  This  might  go  far 
to  deter  the  boldest  student  from  entering  upon  the  study  of  Political 
Economy  by  reading  the  Wealth  of  Nations. 

We  do  not  hesitate  to  ascribe  to  J.  B.  SAY  the  whole  honor  of  taking 
the  first  important  step  towards  developing  the  science  of  Political 
Economy,  if,  in  its  present  position,  it  has  good  title  to  be  regarded  as  a 
science.  Struck  by  the  reputation  of  -Adam  Smith,  and  the  success  of 
his  work,  he  saw  at  once  that  the  subject  had  a  great  hold  on  the  public 
mind,  and  believing  that  if  such  an  imperfect  production  could  secure 
him  so  great  a  name,  there  was  an  opportunity  of  attaining  a  still  higher 
reputation  by  producing  a  more  perfect  work  upon  the  subject.  His 
ambition  rose  to  the  point  of  founding  a  new  science  —  the  Science  of 
Wealth.  Upon  this  idea  he  labored  with  such  success  as  to  produce  a 
work,  which,  if  it  has  not  placed  its  author  as  high  on  the  roll  of  fame 
as  Smith,  it  has  at  least  been  immeasurably  more  read,  and  its  contents 
have  exercised  far  more  influence  upon  the  public  mind.  It  was  intel 
ligible  and  methodical.  The  subject  was  popular,  and  something  of  the 
kind  was  required,  not  only  to  satisfy  the  craving  for  knowledge  upon 
the  subject  by  statesmen  and  men  of  business,  but  also  to  serve  as  a 
text-book  for  Professors.  It  was  received  with  immense  favor,  and  soon 
appeared  in  nearly  all  the  languages  of  Europe.  Since  the  advent  of 


XXX  PRELIMINARY    ESSAY. 

Say's  Treatise,  the  science  of  Political  Economy  is  referred  to  familiarly 
and  commonly  as  regularly  admitted  into  the  family  of  sciences.     But 
whilst  no  one  can  dispute  the  ability  of  his  contribution  to  the  subject, 
there  has  subsequently  been  strong  opinions  that  he  has  not  founded  a 
science.     The   distinction  is  very  important;   if  a  contribution  only, 
then  what  Say  writes  rests  upon  his  single  authority ;  if  a  science  is  set 
forth  in  his  work,  we  are  bound  to  receive  what  he  says  as  the  truths 
or  laws  of  science.     It  becomes  indispensable,  then,  to  know  when  we 
take  up  Say's  Treatise,  whether  his  work  is  the  teaching  of  a  science, 
or  the  speculations  of  a  Political  Economist.     That  it  is  a  work  of 
great  ability,  all  should  admit;  that  its  success  and  influence  have  far 
transcended  its  merits,  is  now  plainly  seen.     Its  claims  to  be  a  work  of 
science  have  been  successfully  questioned.    We  have  seen  that  the  able 
Economist  and  logician,  J.  S.  Mill  (ante,  p.  22),  pronounces  Political 
Economy  to  be  an  abstract  science,  constructed  upon  reasonings  d  priori. 
"When  he  said  this,  he  had  all  the  advantage  of  an  elaborate  opinion  by 
Say  that  it  is  an  experimental  science  founded  upon  induction  and  obser 
vation  of  facts,  and  upon  reasoning  d  posteriori.     Say  appeals  to  the 
Baconian  philosophy  as  applicable  to  his  inquiries,  and  that  upon  which 
bis  work  'is  founded.     Mill  rejects  that  method  of  reasoning  as  inappli- 
cable  to  the  moral  and  mental  sciences,  and  he  does  it  upon  grounds 
which  cannot  be  shaken.    For  these  grounds  we  refer  to  the  work  above 
cited.     But  we  think   it   can   require    little   reflection   upon   broader 
grounds  than  those  taken  by  him  to  reach  the  same  conclusion.     We 
think  that  the  events  of  human  life,  subject  to  the  control  of  human 
reason,  influenced  by  human  passions  and  feelings,  and  complicated  by 
the  very  varying  chances  and  changes  of  life,  are  not  in  their  nature 
the  subject  of  inductive  philosophy.    The  mind  which  is  capable  of  in 
ductive  reasoning  is  not  itself  the  subject  of  such  a  process.     Men  are 
not  like  bees  or  ants,  whose  habits  and  laws  are  proper  objects  of  this 
philosophy.     It  might  as  well  be  attempted  to  ascertain  the  laws  or 
legislation  of  a  people  by  their  actions,  as  to  determine  the  problems  of 
their  Political  Economy  by  observation  of  their  modes   of  business. 
Bacon  himself  foresaw  this  difficulty  in  the  application  of  his  system, 
and  remarks,  that  in  the  sciences  which  relate  to  mind  and  morals,  "  it 
must  be  bounded  by  religion,  else  it  will  be  subject  to  deceit  and  delu 
sion."     What  makes  the  inapplicability  very  plain  in  the  present  case 
is,  that  in  regard  to  wealth,  which  is  stated  to  be  the  object  of  the  sup 
posed  science,  it  is  impossible  to  separate  it  from  moral  or  religious 
considerations  in  any  circumstance  of  its  production  or  distribution.    It 


PRELIMINARY    ESSAY. 

is  only  of  any  possible  importance  as  it  concerns  men;  and  men,  in 
their  relations  with  wealth  and  its  production  and  distribution,  cannot 
lay  aside  moral  and  religious  considerations. 

The  argument  of  Say  to  prove  that  Political  Economy  is  founded  on 
a  generalization  of  facts,  will  be  found,  at  large,  in  the  preliminary  dis 
course  to  his  Treatise.  It  will  be  seen  that  he  rests  his  system  upon  it. 
Now  the  least  that  can  be  said  when  such  men  as  J.  B.  Say  and  J.  S. 
Mill*  differ  widely  as  to  the  very  basis  of  Political  Economy,  as  to  the 
processes  of  reasoning  by  which  it  is  constructed,  as  to  the  fact  of  its 
being  an  abstract  or  an  experimental  science,  is,  that  students  and 
readers  must  wait  with  patience  until  the  professors  and  other  capable 
persons  decide  a  question  so  vital  to  its  authority.  And  this  is  the  more 
necessary  because  there  is,  as  we  shall  see,  as  much  disagreement  about 
matter  as  about  form. 

"  When  Smith  is  read  as  he  merits  to  be,"  remarks  Say,")"  "  it  is  seen 
that  before  him  there  was  no  Political  Economy."  And  Smith  cannot 
have  produced  a  science,  for,  according  to  Say,  his  work  "  can  only  be 
considered  as  an  immethodical  assemblage  of  the  soundest  principles  of 
Political  Economy,  supported  by  luminous  illustrations  of  highly  inge 
nious  researches  in  statistics,  blended  with  instructive  reflections ;  it  i3 
not,  however,  a  complete  treatise  of  either  science,  but  an  irregular 
mass  of  curious  and  original  speculations,  and  of  known  demonstrated 
truths." 

Say,  in  the  introduction  to  the  later  editions  of  his  Treatise,  makes 
an  elaborate  effort  to  show  that  his  system  is  founded  upon  the  inductive 
processes  of  the  Baconian  philosophy.  The  reader  who  examines 
his  process  will  see  with  what  justice.  As  he  was  founding  a  science, 
he  wished  to  avail  himself  of  the  sanction  of  a  name  like  Bacon's : 
not  dreaming  that^according  to  the  leading  Economists  of  no  distant 
day,  this  choice  of  Bacon  as  his  guide  would  be  regarded  as  a  blunder. 
He  did  not  discover  that  Bacon's  system  was  inapplicable ;  but  that  he 
met  difficulties  in  the  outset,  is  quite  visible.  He  manipulates  the  term 
facts,  which  represent  the  things  to  be  observed  in  the  Baconian 
method,  until  he  obtains  an  aspect  which  may  answer  his  purpose. 
He  first  makes  two  classes  of  facts :  objects  that  exist,  and  events  that 
take  place.  "  The  manner  in  which  things  exist  and  take  place  is  what 

*  Many  other  names  might  be  mentioned  on  both  sides  of  this  question.     We 
have  seen  above  that  Senior  concurs  with  Mill,  so  also  Tracy  and  Rossi, 
f  Discours  Freliminaire. 


XXX11  PRELIMINARY    ESSAY. 

is  called  the  nature  of  things,  and  a  careful  observation  of  the  nature 
of  things  is  the  sole  foundation  of  all  truth."  Hence,  a  two-fold  classi 
fication  of  science,  the  descriptive  and  experimental.  Political  Economy 
belongs  to  the  latter;  in  showing  the  manner  in  which  events  take 
place  in  relation  to  wealth,  it  forms  a  part  of  experimental  science.  But 
facts  that  take  place  are  subdivided  into  general  or  constant,  or  par 
ticular  and  variable.  General  facts  are  the  results  of  the  nature  of 
things  in  all  analogous  cases :  particular  facts  are  the  results  of  several 
operations  modified  by  each  other  in  a  particular  case.  Objects  that 
exist  and  events  that  take  place,  embrace  two  distinct  sciences,  Political 
Economy  and  Statistics.  Political  Economy,  from  facts  always  carefully 
observed,  makes  known  to  us  the  nature  of  wealth ;  from  the  knowledge 
of  its  nature  deduces  the  means  of  its  creation,  unfolds  the  order  of  its 
distribution  and  the  phenomena  of  its  destruction.  It  is,  in  other  words, 
an  exposition  of  the  general  facts  observed  in  relation  to  this  subject. 
—  "  General  facts,  or  if  you  please,  general  laws,  which  facts  follow, 
are  styled  principles  when  we  speak  of  their  application."  —  "  Political 
Economy,  in  the  same  manner  as  the  exact  sciences,  is  composed  of  a 
few  fundamental  principles  and  a  great  number  of  corollaries  or  conclu 
sions  drawn  from  those  principles.  It  is  essential  that  those  principles 
be  strictly  deduced  from  observation."  —  "A  treatise  on  Political 
Economy  will  then  be  confined  to  the  enunciation  of  a  few  general  prin 
ciples  nofc  requiring  even  the  support  of  proofs  or  illustrations,  because 
these  will  be  but  the  expression  of  what  every  one  will  know."  The  sub 
stance  of  Say's  application  of  the  Baconian  system  of  induction,  seems, 
then,  to  be  this :  —  The  science  of  Political  Economy  must  be  formed 
by  an  induction  or  observation  of  facts  ;  by  facts  is  intended  general 
facts,  or  the  nature  of  things ;  but  by  general  facts  is  meant  general 
laws,  which  facts  follow  ;  and  by  these  are  intended  principles  which 
must  be  strictly  deduced  from  observation;  and  Political  Economy, 
like  the  exact  sciences,  is  composed  of  a  few  fundamental  or  general 
principles  not  requiring  the  support  of  proofs  or  illustrations,  being  the 
expression  of  what  every  one  knows.  It  must  be  difficult  to  find  any 
warrant  for  such  philosophizing  in  the  pages  of  Bacon.  Say  makes 
this  long  incursion  into  the  field  of  inductive  philosophy,  and  upon  his 
return,  instead  of  exhibiting  an  array  of  facts  with  his  process  of  in 
duction,  he  tenders  us  a  few  general  principles  requiring  no  proofs,  being 
the  expression  of  what  every  one  knows.  Could  there  be  any  need  of 
invoking  the  aid  of  Bacon,  if  such  were  the  premises  upon  which  his 
system  was  to  be  built  ? 


PRELIMINARY    ESSAY.  XXxiii 

We  have  already  adverted  to  the  fact  that  the  work  of  Say  was  re 
ceived  with  signal  favor :  this  favor,  however,  was  far  from  being  uni 
versal.  Its  method  and  general  clearness  of  statement  recommended 
it  as  a  text-book,  for  which  it  was  designed,  upon  a  subject  felt  to  be  of 
importance,  but  upon  which  no  book  suitable  for  that  purpose  had  ap 
peared.  It  did  not  long  escape  severe  criticism  and  even  denunciation. 
Its  hard  materialism  was  soon  detected;  its  attempt  to  construct  a 
science  of  wealth  apart  from  man,  its  sole  possessor,  and  whom  alone 
it  concerns,  and  without  any  consideration  of  humanity,  morals  or  reli 
gion,  was  unsparingly  denounced.  A  great  discussion  followed,  which 
we  cannot  even  refer  to  now.  We  select  two  opinions  of  Say,  very 
deliberately  expressed ;  one  by  an  eminent  Economist  of  his  own  School, 
and  the  other  by  one  who  denied  his  whole  system.  The  first  is 
Adolphe  Blanqui,  who,  in  his  history  of  Political  Economy,  after  an 
appreciation  of  the  merits  of  Say,  in  which  he  bestows  the  highest  en 
comiums,  proceeds  to  offer  some  of  the  objections  to  which  his  work  is 
exposed :  — 

"  The  subjects  which  affect  us  so  nearly  at  present,  such  as  "Wages  and 
Population,  seera  scarcely  to  affect  him  :  He  proceeds  to  their  examination 
with  a  degree  of  coldness ;  he  adopts,  without  abatement,  the  opinions  of 
Malthus,  and  it  is  here  that  his  writings  will  be  for  ever  vulnerable,  and 
cannot  fail  of  being  surpassed  by  the  School  of  Sismondi.  He  has  con 
sidered  production  far  too  independently  of  the  producers.  He  was  seduced 
by  the  prodigies  of  English  production,  and  did  not  think  of  the  human 
suffering  which  followed  in  their  train.  He  looked  upon  wages  as  suffi 
cient,  not  because  they  enabled  the  laborer  to  live,  but  because  they  kept 
him  from  dying.  The  utility  of  his  works  consists  much  more  in  the 
errors  he  has  dissipated,  than  in  the  truths  he  has  discovered.  He  failed 
in  not  regarding  from  a  point  of  view  more  social  and  more  elevated,  the 
questions  of  pauperism  and  wages :  we  find,  in  reading,  something  hard 
and  repulsive,  which  recalls  the  abstract  formulas  of  Malthus  and  Ri- 
cardo.  His  logic,  when  on  the  subject  of  succor  to  the  unfortunate,  is 
pitiless,  and  his  severe  rebukes  of  benevolence  look  as  if  he  had  more 
encouragements  for  misconduct  than  consolations  for  misfortune."* 

The  other  opinion  in  regard  to  Say,  is  from  Viscount  Alban  de  Ville- 
neuve  Bargemont's  History  of  Political  Economy.     He  belongs  to  what 
is  sometimes  called  the  Humanitarian  School,  which  takes  the  well-being}^ 
of  men,  and  not  wealth,  as  the  starting  point  of  its  system  :  — 

*  Histoire  d'Economie  Politique,  par  A.  Blcmqui  (ainty,  Professor  of  Political 
Economy  in  the  Conservatory  of  Arts  and  Trades,  and  Director  of  the  School  of 
Commerce. 

3 


PRELIMINARY    ESSAY. 

"  This  work  (Say's  Treatise),  which  placed  its  author  in  the  first  rank 
of  the  disciples  of  Smith,  has  greatly  contributed  to  propagate  in  France 
and  Europe  the  new  English  doctrines  of  Political  Economy." — "He  ad 
vanced  on  these  subjects  propositions  so  bold  and  paradoxical  that  they 
endangered  governments,  religion,  and  the  law  of  property  itself;  for,  solely 
preoccupied  with  the  increase  of  production,  he  seemed  frequently  to  point 
at  these  institutions  as  more  injurious  than  useful  to  public  wealth."  — 
"  Imbued  with  the  philosophy  of  the  eighteenth  century,  habituated  by 
the  nature  of  his  studies  to  seek  for  nothing  beyond  material  utility,  J.  B. 
Say  was  the  organ  of  a  science  which  was  developed  at  an  epoch  when 
there  was  no  belief  in  any  thing  beyond  the  material  interests  of  life."  — 
"  The  first  edition  of  his  work  was  published  in  1803 :  it  rapidly  disap 
peared.  But  theories  so  clearly  repelling  the  intervention  of  government 
and  the  influence  of  civil  and  religious  institutions,  could  not  readily  be 
tolerated  by  an  overshadowing  authority  (Bonaparte)  jealous  of  its  power, 
and  which  was  striving  to  place  society  upon  a  more  solid  basis.  The 
author  was  not  permitted  to  publish  the  second  edition  until  ten  years 
after,  when  it  was  dedicated  to  the  Emperor  Alexander." — "Whatever 
may  be  the  talents  of  the  author,  there  is  the  more  reason  to  regret  that 
abuse  of  science  and  that  spirit  of  system  which  have  drawn  him,  by  a 
series  of  conclusions  logically  deduced  from  false  and  erroneous  principles, 
to  look  upon  man  only  as  an  instrument  or  a  means  of  production,  and  to 
shed  doubt,  contempt,  or  sarcasm  upon  institutions  which  men  feel  it  their 
duty  to  defend  or  respect."  * 

Two  important  works  upon  Political  Economy  appeared  in  1815,  in 
which  this  disposition  to  bow  to  the  authority  of  Say  is  manifested, 
whilst  the  writers  differ  from  him,  not  only  widely,  but  radically  j  we 
refer  to  LE  COMTE  DESTUTT  DE  TRACY,  and  HENRY  STORCH.  The 
work  of  the  former,  to  which  we  refer,  is  the  fourth  volume  of  his 
"  Treatise  upon  Ideology"  of  which  Mr.  Jefferson,  who  revised  a  trans 
lation  made  in  this  country  from  the  manuscript  of  the  author,f  before 
the  publication  in  France,  speaking  of  the  original,  said,  "  in  which  no 
word  is  unnecessary,  no  word  can  be  changed  for  the  better ;  and  severity 
of  logic  results  in  that  brevity  to  which  we  wish  all  science  reduced." 
As  a  logician,  Destutt  De  Tracy  would  rank  as  far  above  Say  as  the 
latter  is  above  Adam  Smith.  Say's  error  consisted  in  assuming  wealth  as 
the  object  of  a  science :  Tracy,  after  a  logical  process  of  great  length, 

*  Histoire  d'Economie  Politique;  Vol.  II.,  Chap.  XVI.,  pp.  264,  265,  266.  He 
is  also  the  author  of  Economie  Politique  Chrettinne;  3  Vols.  8vo.,  1834.  He  no 
doubt  regarded  Say's  work  as  an  emanation  of  the  infidel  school. 

f  Traite  d'Economie  Politique,  Paris,  1823.  We  quote  from  the  translation,  as 
in  it  we  first  examined  the  work.  Published  at  Georgetown,  in  1817. 


PRELIMINARY    ESSAY.  XXXV 

being,  in  fact,  a  supplement  to  his  system  of  logic,  finds  the  basis  of 
Political  Economy  in  Ideology,  or  the  science  of  the  mind.  He  wished 
"  to  place  the  moral  and  political  sciences  on  their  true  basis,  a  know 
ledge  of  our  moral  and  intellectual  faculties." 

It  is  impossible  to  give  the  reader  any  idea  of  such  a  work  as  that  of 
Destutt  Tracy  by  short,  or  even  long  extracts.  It  can  only  be  said 
that,  as  he  finds  the  basis  of  the  moral  and  political  sciences  in  a  know 
ledge  of  the  intellectual  faculties,  he  finds  the  basis  of  Political  Economy 
in  man,  the  owner  of  those  faculties.  In  all  his  reasonings  and  obser 
vations  upon  the  subject,  he  keeps  his  eye  on  man  as  found  in  society; 
on  men,  rich  and  poor,  strong  and  weak.  He  does  not  treat  wealth  as 
the  chief  topic :  in  his  view,  individual  strength,  or  the  power  to  labor, 
is  the  primitive  riches ;  the  inequalities  which  arise,  and  inevitably  exist 
in  society,  are  motives  for  protecting  those,  who,  from  the  accidents  of 
life,  or  natural  inability,  fall  behind,  and  become  less  able  to  make  sure 
of  a  subsistence,  —  "  the  law^  should  always  endeavor  to  protect  weak 
ness." —  "  I  think  that  all  must  agree,  that  when  a  considerable  portion 
of  society  is  in  a  state  of  too  great  suffering,  and  consequently,  too 
much  brutalized,  there  is  neither  repose,  nor  safety,  nor  liberty  possible, 
even  for  the  powerful  and  rich ;  and  that,  on  the  contrary,  the  first  citi 
zens  of  a  State  are  really  much  greater  or  happier  when  they  are  at  the 
head  of  a  people,  enjoying  that  honest  ease  which  developed  in  them 
all  their  intellectual  and  moral  faculties." 

HENRY  STORCH  was  one  of  the  tutors  of  the  Grand  Dukes  Alexander 
and  Nicholas,  and  it  was  to  them  he  delivered  a  "  Course  of  Political  X 
Economy  "  which  we  are  about  to  notice.*  Storch  has  attained,  and 
deserves,  a  high  rank,  as  a  man  of  ability  and  a  Political  Economist. 
McCulloch  places  his  writings  "  at  the  head  of  all  the  works  on  Po 
litical  Economy  ever  imported  from  the  Continent  into  England."  This 
opinion,  deliberately  expressed  in  1825,  and  as  deliberately  repeated  in 
1845,  places  him  above  Say,  exceedingly  to  the  disparagement  of  the 
latter,  who  had  published  his  work  as  the  exposition  of  a  complete  sci 
ence,  to  which  all  men  should  bow  as  to  the  truth.  There  is,  however, 
a  very  wide  and  radical  difference  in  their  conception  of  the  subject. 
The  explanatory  title  of  Storch  is  the  exposition  of  the  principles  which 
determine  the  prosperity  of  nations,  which  gives  a  very  different  point 
of  departure  from  that  of  Say.  "  Until  now,"  he  says  in  his  preface, 

*  Cours  d' Economic  Politique  ou  exposition  des  principes  qui  determinent  la  prospe- 
rite  des  nations;  1st  Edition,  6  Vols.  8vo.,  1815.  We  refer  to  the  Paris  edition 
of  1823,  with  notes  by  Say,  in  4  Vols.,  8vo.  A  fifth  yolume  has  been  added. 


XXXvi  PRELIMINARY    ESSAY. 

"  Political  Economy  has  been  regarded  as  the  science  of  the  wealth  of 
nations ;  I  have  attempted  to  show  that  it  embraces  their  prosperity, 
and  that  the  theory  of  civilization  is  included,  and  is  equally  essential 
to  the  objects  of  the  science."  —  "I  have  tried  to  sketch  the  outline  of 
this  new  doctrine,  for  which  the  materials  were  in  wide  profusion." 
From  the  Reflections  in  the  introductory  portion  of  his  work,  we  take 
the  following  passage  :  — 

"The  facts  from  which  Political  Economy  is  deduced,  belong  to  the 
moral  order;  they  are  the  result  of  the  action  of  human  nature.  Man 
himself  is  the  artisan  of  wealth  and  of  civilization.  It  is  he  who  subjects 
these  to  his  wants  and  his  enjoyments ;  thus,  all  the  phenomena  which 
these  objects  present  are  founded  upon  human  nature,  and  can  only  be 
explained  by  it.  This  leads  us  to  an  important  remark,  which  weakens 
the  analogy  we  have  discovered  between  Natural  Science  and  Political 
Economy.  The  former  being  based  on  physical  facts  which  are  susceptible 
of  a  rigorous  appreciation,  belong  to  the  domain  of  the  exact  sciences ; 
Political  Economy,  on  the  contrary,  being  based  upon  moral  facts,  that  is 
to  say,  upon  facts  produced  by  the  faculties,  wants,  and  will  of  man,  is 
not  susceptible  of  calculation,  and  takes  its  place  in  the  circle  of  the  moral 
sciences."—  (Vol.  L,  p.  22.) 

In  another  portion  of  his  introduction  he  says :  —  "  At  first  glance 
it  is  seen  how  much  this  theory  of  Adam  Smith  is  superior  to  that  of 
the  Economists  (Physiocrats);  these  philosophers  had  made  Political 
Economy  a  purely  natural  science ;  Smith  raised  it  to  the  rank  of  a 
moral  science."  These  two  passages  excited  the  ire  of  Say,  who,  to  the 
very  great  displeasure  of  Storch,  had  edited  an  edition  of  his  work  in 
Paris,  with  notes,  in  which  he  makes  no  small  effort  to  lessen  the  repu 
tation  and  authority  of  Storch's  labors.  In  reference  to  the  passage  last 
cited,  Say  exclaims:  —  "  He  has  done  a  great  deal  more,  he  has  raised  it 
to  the  rank  of  the  experimental  sciences  !"  The  exhibitions  of  spleen 
or  impatience  which  characterize  these  notes  of  Say,  show  how  deeply 
his  jealousy  was  roused  by  the  power  and  truth  of  Storch's  positions. 
His  conduct  is  the  less  pardonable,  as  Storch  had  transcended  even  the 
demands  of  literary  courtesy  in  concessions  to  Say's  high  position  as  a 
Political  Economist. 

We  have  the  authority  of  McCulloch  that  the  "  Principles  of  the 
Science  of  Wealth,"  by  JOSEPH  DROZ,  is  "  one  of  the  best  elementary 
works  on  the  science  in  the  French  language."  *  Droz  is  a  writer  of 
high  moral  tone  and  humane  feelings.  His  work  is  either  a  strong 

*  Paris,  8vo.,  1829. 


PEELIMINARY    ESSAY.  XXXV11 

specimen  of  the  necessity  of  bowing  to  Say's  supremacy  in  that  day, 
even  by  those  who  differed  from  him,  or  it  is  conceived  in  a  spirit  of  the 
deepest  irony  in  reference  to  Say's  system.  He  treats  Say  throughout 
with  the  most  unbounded  deference,  as  the  head  of  the  great  School  of 
Political  Economy.  Whilst  his  eyes  are  thus,  however,  deferentially 
fixed  upon  him,  like  a  stout  waterman,  he  is  rowing  the  other  way. 
Say's  science  is  of  wealth,  that  of  Droz  relates  to  men  as  they  are  con 
cerned  with  wealth.  "  Political  Economy  is  a  science,  the  object  of 
which  is  to  render  comfort  as  general  as  possible.  All  good  men,  even 
those  who  do  not  rise  to  the  consideration  of  wise  theories,  endeavor  to 
promote  this  good  end." — "The  activity  or  inactivity  of  labor,  the 
good  or  bad  apportionment  of  riches,  depends,  in  many  respects,  upon 
the  ideas,  right  or  wrong,  which  governments  form  .upon  the  subject  of 
Political  Economy.  The  science  is  essential  to  the  work  of  ameliorating 
human  condition."  —  "The  study  of  Political  Economy  may  dry  up 
narrow  minds  and  reduce  their  vision  on  earth  to  goods  and  sales  and 
profits ;  but  this  study  must  ever  be  for  minds  nobly  endowed,  a  source 
of  exalted  meditation  upon  the  means  of  ameliorating  the  lot  of  the 
human  family,  and  upon  the  blessings  vouchsafed  by  the  Eternal  Author 
of  all  good."  (Chap.  V.,  Book  I.)  —  "  In  studying  the  science  of 
riches,  it  is  essential  never  to  lose  sight  of  the  relation  between  wealth 
and  the  amelioration  of  human  condition,  between  wealth  and  human 
happiness..  To  consider  riches  in  themselves  and  for  themselves,  is  to 
denaturalize  the  science.  By  the  habit  of  regarding  only  the  production 
and  distribution  of  riches,  men  come  finally  to  see  nothing  in  the  world 
but  commercial  interests  :  many  writers  employ  expressions  which  seem 
to  materialize  all  our  interests."  —  "  Political  Economy,  well  conceived 
must  ever  be  the  auxiliary  of  morals.  We  must  not  take  riches  for  an 
end,  they  are  a  means ;  their  importance  results  from  their  power  of 
relieving  human  necessities  and  soothing  human  suffering,  and  the  most 
precious  riches  are  those  which  are  devoted  to  the  well-being  of  multi 
tudes."  —  "  Some  Economists  speak  as  if  they  believed  men  were  made 
for  products,  not  products  for  men."  The  difference  between  this  doc 
trine  and  that  of  Say  is,  that  the  latter,  so  far  as  it  notices  human 
welfare  at  all,  regards  it  as  a  means  to  increase  production ;  the  wealth 
produced  being  the  end.* 

*  In  the  Dictionary  of  Political  Economy,  Paris,  1853,  this  work  of  Droz  is 
thus  spoken  of:  —  "In  this  precious  volume,  as  in  all  the  writings  of  this  author, 
we  find  an  elegant  and  clear  style,  sentiments  of  high  and  pure  morality,  which 
bespeak  a  lofty  mind,  a  noble  nature  ;  and  that  charming  benevolence  which  is 
so  apparent  and  so  attractive  in  the  conversation  of  that  good  man." 


XXXVlii  PRELIMINARY    ESSAY. 

J.  C.  L.  SIMONDE  DE  SISMONDI  is  well  known  and  distinguished, 
both  as  a  historian  and  as  a  Political  Economist ;  he  was  a  prolific  writer 
in  the  latter  character.  His  first  publication  on  the  subject  was  made'1 
as  early  as  that  of  Say.  He  was  then  a  follower  of  Smith,  but  being 
an  ardent  friend  of  humanity,  his  views  underwent  a  complete  change 
in  the  progress  of  his  investigations.  No  more  pleasing  task  could  be 
offered  us  than  turning  through  the  voluminous  works  of  Sismondi  for 
the  evidences  of  his  pure  love  of  human  welfare,  and  his  detestation  of 
the  science  of  wealth  apart  from  human  well-being.  In  the  discourse 
pronounced  before  the  French  Academy  upon  the  occasion  of  the  death 
of  Sismondi,  who  was  one  of  the  five  foreign  Associates,  M.  Mignet, 
the  perpetual  Secretary,  speaking  of  Sismondi' s  survey  of  the  masses 
of  the  laboring  population  in  Europe,  represents  him  as 
*  "  Surprised  and  troubled,  and  as  asking  himself  if  a  science  which  sacri 
fices  the  happiness  of  man  to  the  production  of  wealth,  which  oppresses 
millions  of  human  beings  with  labor  without  providing  them  with  bread, 
was  the  true  science  of  Political  Economy.  He  answered,  no :  and  he  ut 
tered  a  cry  of  alarm  to  warn  governments  and  nations  of  the  danger  which 
threatened  them." 

Mignet  closes  an  eloquent  notice  of  the  life  and  works  of  Sismondi, 
with  the  following  words  :  — 

"  M.  De  Sismondi  is  one  of  those  men  who  have  done  most  honor  to  lite 
rature  by  the  greatness  of  their  labors,  and  the  dignity  of  their  lives. 
No  one  has  more  earnestly  considered  the  duties  of  intellect.  Amiable  in 
his  private  relations,  devoted  in  friendships,  indulgent  towards  others, 
severe  to  himself,  endowed  with  an  activity  which  never  at  any  time  re 
laxed,  with  a  sincerity  which  never  on  any  occasion  belied  itself,  he  pos 
sessed  in  the  highest  degree  the  love  of  justice,  and  a  passion  for  good. 
With  these  noble  sentiments  he  has  imbued  politics,  history,  social  economy ; 
to  make  these  contribute  to  the  cautious  progress  of  the  institutions  of 
States,  to  the  instruction  and  well-being  of  nations.  For  half  a  century 
he  has  thought  nothing  that  was  not  honorable,  written  nothing  that  was 
not  moral,  wished  nothing  that  was  not  useful ;  thus  has  he  left  a  glorious 
memory,  which  will  be  ever  respected.  In  him  the  Academy  has  lost  one 
of  its  most  eminent  associates,  Geneva  one  of  her  most  illustrious  citizens, 
humanity  one  of  its  most  devoted  defenders.  ("  Political  Economy,  and 
Philosophy  of  Government,"  Essays  from  Sismondi;  London,  1847,  pp. 
15-24.) 

"My  life,"  says  Sismondi,  "has  been  divided  between  the  study  of  Po 
litical  Economy  and  that  of  history ;  —  I  have  endeavored  not  to  let  those 
lessons  be  lost  which  are  given  by  experience  as  to  what  contributes  to  create 
and  maintain  the  prosperity  of  nations.  But  above  all,  I  have  always  con- 


PRELIMINARY    ESSAY.  XXxix 

sidered  wealth  as  a  means,  and  not  as  an  end.  I  hope  it  will  be  seen  by  my 
constant  solicitude  for  the  cultivator,  for  the  artizan,  for  the  poor,  who  gain 
their  bread  by  the  sweat  of  their  brow,  that  all  my  sympathies  are  with  the 
laboring  classes." — "I  experienced  the  deepest  emotion  in  contemplating  the 
commercial  crisis  which  has  just  swept  over  Europe ;  in  beholding  the  cruel 
sufferings  of  the  manufacturers  and  workmen,  of  which  I  was  witness  in 
Italy,  in  Switzerland,  in  France,  and  which  authentic  accounts  testified  not 
to  have  been  less  severe  in  England,  in  Germany,  and  in  Belgium.  I  felt 
convinced  that  governments,  that  nations,  were  upon  a  false  path,  and  that 
they  were  aggravating  the  distress  they  were  endeavoring  to  remedy."*  — 
"The  physical  well-being  of  men,  in  so  far  as  it  can  be  the  work  of  govern 
ment  or  society,  is  the  object  of  Political  Economy.  All  the  physical  wants 
of  men,  for  which  they  are  dependent  upon  their  fellow-men,  can  be  satisfied 
by  means  of  wealth."  —  "  Wealth  is  only  a  benefit  when  its  blessings  are 
diffused  among  all  classes ;  population  is  an  advantage  only  when  men  are 
sure  of  finding  in  labor  the  resources  of  an  honest  existence." —  "  A  single 
thought  directs  us  in  every  portion  of  this  work ;  the  inquiry  for  the 
greatest  good  of  the  human  family,  —  that  chief  good  which  includes  moral 
perfectibility  with  material  happiness.  A  single  rule  suffices  to  classify 
the  rights  and  claims  of  men.  Society  is  intended  for  the  greatest  good 
of  all."  —  "  It  may  be  seen  at  once,  that  more  than  any  of  my  predeces 
sors,  I  regard  Political  Economy,  in  its  relations  with  the  soul  and  intelli 
gence.  But  to  subsistence  pertains  life,  and  to  life  pertains  all  the  moral 
and  intellectual  development  of  which  the  human  race  is  susceptible."  — 
"  Social  science  ought  always  to  have  for  its  object  men  united  in  society 
—  for  in  society  everything  proceeds  from  men,  and  everything  relates  to 
men,  united  by  a  common  bond.  But  wealth  —  shall  we  call  it  an  at 
tribute  of  men  or  of  things? — wealth  is  a  term  of  comparison  which  has 
no  sense,  unless  we  determine  to  what  it  refers."  —  "A  science  of  wealth, 
apart  from  the  interests  of  men,  is  a  mere  abstraction  —  an  edifice  without 
any  real  foundation."  — "Wealth  is  the  product  of  that  human  labor  which 
procures  for  men  all  the  material  enjoyments  they  can  attain  :  —  it  is  the 
representation  of  these  physical  enjoyments,  and  of  all  the  moral  and  in 
tellectual  gratifications  which  can  flow  from  them.  Certainly:  but  for 
whom  ?  This  question  should  never  be  overlooked,  and  yet  how  seldom  it 
occurs  to  or  influences  the  mere  theorists  in  Political  Economy.  For 
whom  ?  According  to  the  response  they  make  to  that  question,  man  him 
self  pertains  to  wealth,  when  the  truth  is,  that  riches  are  only  riches  be 
cause  they  belong  to  man."f  In  another  place,  he  exclaims,  in  reference 
to  Ricardo  :  —  "  What,  is  wealth  then  everything,  —  is  man  absolutely 
nothing !" 

*  Nouveaux  Principes  d' Economic  Politique;  Tom.  I,  p   4.    Paris  edition,  1819. 
f  Etudes  sur  L1 Economic  Politique;  Vol.  L,  pp.  2,  3,  4-9. 


xl  PRELIMINARY    ESSAY. 

We  regret  being  obliged  to  confine  our  extracts  from  Sismondi  to  the 
above,  the  originals  of  which  are  merely  introductory  paragraphs ;  his 
works  on  Political  Economy  abound  in  lessons  of  wisdom,  and  in  pro 
tests  of  great  force  and  eloquence  against  the  materialism  of  the  School 
of  Smith  and  Say,  which  are  regarded  by  him  as  equally  dangerous  and 
unphilosophical. 

We  return  to  J.  B.  Say  to  notice  a  work  long  subsequent  to  his 
Treatise.  Whilst  the  latter  was  enjoying  its  high  popularity  in  Europe 
and  America,  the  author,  as  Professor  of  Political  Economy,  was  en 
gaged  in  delivering  a  course  of  lectures  on  the  application  of  his  science, 
which  he  afterwards  published  under  the  title,  "A  Complete  Course  of 
Practical  Political  Economy."  * 

In  the  course  of  his  further  studies,  he  had  the  advantage  of  reading 
the  innumerable  criticisms  and  attacks  made  upon  his  system,  and  we 
now  examine  the  work  just  mentioned,  to  ascertain  if  his  views  have 
undergone  any  change.  It  was  difficult  for  Say  to  acknowledge  that  he 
had  erred,  when  half  the  world  was  proclaiming  that  he  was  right. 
Yet  we  find  evidence  enough  in  the  work  now  before  us  that  he  felt  the 
pressure  both  of  the  logic  and  the  eloquence  which  had  been  brought 
to  bear  against  him.  There  is  a  strong  and  ingenious  effort  made  by 
him  to  stretch  his  narrow  system  to  the  new  basis,  upon  which  alone 
he  must  have  seen  that  the  future  growth  of  the  science  would  take 
place.  He  gradually  lengthened  his  cords  as  he  felt  this  pressure  coming 
upon  him ;  but  he  could  not  do  this  without  weakening  his  stakes,  as 
will  be  apparent  to  those  who  have  read  the  previous  pages  of  this 
Essay.  We  almost  fear  that  the  concessions  in  the  following  extract 
are  less  strong  than  the  impressions  which  the  truth  had  made  upon  the 
author's  mind.  "  The  object  of  Political  Economy,"  says  Mr.  Say  in 
the  "  General  Considerations"  preliminary  to  his  "  Complete  Course" 
"  seems  heretofore  to  have  been  restricted  to  the  knowledge  of  the  laws 
which  govern  the  production,  distribution,  and  consumption  of  riches. 
And  it  is  so  that  I  have  considered  it  in  my  Treatise  upon  Political 
Economy,  published  first  in  1803.  Yet  in  that  same  work  it  can  be 
seen  that  the  science  pertains  to  everything  in  society."  Doubtless  it 
can  be  seen  by  the  reader  who  is  sufficiently  prepared  by  previous  stu 
dies,  but  how  very  large  a  proportion  of  his  readers  have  understood  the 
work  according  to  the  intent  of  the  author  when  it  was  written  !  How 

*  Cours  Complet  <T  Economic  Politique  Pratique,  suivi  des  Melanges,  $c;  6  Vols. 
8vo.,  Paris,  1828-9. 


PRELIMINARY    ESSAY,  xli 

few  out  of  France  have  had  the  benefit  of  the  explanations  of  the 
Complete  Course,  which  has  appeared  only  in  French.  How  many  have 
a  right  to  complain  that  no  editor  of  Say  has  made  known  these  impor 
tant  modifications  of  his  opinions  !  In  this  country,  Political  Economy 
has  been  very  generally  taught  according  to  the  Treatise  of  Say,  in 
which  the  science  was  restricted  to  the  mere  consideration  of  riches. 
But  again,  in  close  proximity  with  the  foregoing,  —  "  Political  Economy, 
which  seemed  to  have  for  its  object  merely  material  wealth,  is  found  to 
embrace  the  entire  social  system"  If  this  is  not  a  virtual  and  definite 
surrender  of  all  that  is  peculiar  in  the  system  of  Say,  it  would  be  diffi 
cult  to  find  words  to  make  it  more  strong.  We  do  not  mean  that  Say 
intended  to  surrender  his  system :  the  harvest  of  golden  opinions  which 
it  was  gathering  for  him,  made  an  actual  surrender  almost  impossible. 
His  concessions  to  truth  and  humanity  were  designed  to  disarm  opposition 
and  conciliate  support. 

No  one  understood  better  than  J.  B.  Say  that  his  science  of  wealth 
could  not  be  developed,  from  considerations  involving  the  entire  interests 
of  the  social  system.  He  had  felt  himself  obliged,  by  his  own  logic,  in 
the  construction  of  his  system,  to  exclude  politics  and  morals;  how 
could  he  then  pretend  to  change  the  basis  of  that  system  without  chang 
ing  the  superstructure  —  that  is,  change  his  premises  without  changing 
his  conclusions !  We  cannot  but  think  that  unprejudiced  and  discrimi 
nating  minds  who  rightly  estimate  v«hat  is  peculiar  to  Say  in  his  Trea 
tise,  and  what  has  been  said  against  his  system  in  general,  and  his 
doctrines  in  particular,  and  what  has  been  done  to  recast  the  whole 
subject,  must  conclude  that  Say  has  been  substantially  superseded.  His 
work  was  never  in  such  repute  in  Great  Britain  as  in  the  United  States, 
and  it  was  complained  there  that  he  refused  to  avail  himself  of  the 
teachings  of  the  British  Political  Economists,  Ricardo,  Malthus,  Tor- 
rens,  and  McCulloch.  It  was  said  that  the  last  edition  of  his  Treatise 
was  little  better  than  the  first.  But  these  neglected  Economists  might 
have  solaced  themselves  with  the  observation  that  Say's  Treatise  never 
even  received  the  benefit  of  the  additional  light  on  the  subject  which  is 
to  be  found  in  Say's  "  Complete  Course :"  Say  refused  to  admit  into 
his  Treatise  even  his  own  discoveries  and  emendations.  He  perceived, 
doubtless,  that  his  system  would  not  bear  emendations,  many  of  which 
struck  at  his  fundamental  principles.  His  was  a  logical  system,  which 
could  not  endure  the  .process  of  addition  or  subtraction  without  danger 
of  crumbling  to  pieces. 

A  man  of  very  commanding  talents  succeeded  to  Say's  chair  of  Po- 


Xlii  PRELIMINARY    ESSAY. 

litical  Economy  in  the  College  of  France,  in  the  year  1833.  PELLE- 
GRINO  Rossi,*  an  Italian  by  birth,  but  for  some  time  resident  in 
Switzerland,  could  have  had  no  claims  to  such  a  position  but  the  power 
of  his  mind  and  his  well-known  acquirements.  During  the  period  of 
his  Professorship,  he  was  raised  to  the  Peerage  by  the  title  of  Count 
Rossi.  His  published  lectures  occupy  four  8vo  volumes.  It  is  obvious 
to  every  reader  that  Rossi  was  embarrassed  by  the  high  repute  of  his 
predecessor.  Whatever  the  points  of  difference  between  him  and  Say, 
he  could  not  with  propriety  make  those  differences  very  prominent.  It 
is  quite  visible,  however,  that  if  he  has  not  made  them  offensively 
prominent,  he  has  not  been  at  much  pains  to  conceal  them.  He  did 
not  teach  the  system  of  Say,  but  quite  another  system.  Rossi,  it  is 
plain,  appreciated  more  fully  than  Say  the  force  of  the  objections  urged 
against  Say's  doctrines;  he  knew  that  these  objections  not  only  endan 
gered,  if  they  did  not  destroy,  the  system  of  Say,  but  that  they  threat 
ened  even  the  position  that  Political  Economy  was,  or  could  be,  a 
science ;  he  addressed  himself  at  once  mainly  to  the  task  of  vindicating 
the  claims  of  the  subject  to  be  regarded  as  a  science :  — 

"Doubtless,"  he  says,  "there  is  a  science  of  Political  Economy;  for 
there  is  an  order  of  facts,  an  order  of  particular  ideas,  of  which  this  sci 
ence  has  for  its  object  to  exhibit  the  origin,  the  development,  the  connec 
tion,  and  the  results.  There  is  a  Political  Economy,  because  man,  with 
his  inclinations,  his  wants,  his  intelligence,  and  his  pawer,  is  placed  in 
presence  of  material  nature,  not  only  to  know  it,  but  to  govern  and  appro 
priate  it  to  his  wants." f  —  "As  long  as  it  was  possible,  its  enemies  denie.d 
the  existence  of  any  such  science :  when  that  was  no  longer  possible,  every 
one  endeavored  to  turn  it  to  the  promotion  of  his  own  interests."  —  "In 
this  conflict  of  private  interests,  some  forcing  facts  for  one  purpose,  some 
using  arguments  or  influence  for  another,  the  science,  as  Rossi  urges,  could 
not  but  suffer."  —  "Need  there  be  wonder,"  he  asks,  "  if  amidst  such  con 
flicting  claims,  such  opposing  exigencies,  such  an  inextricable  mass  of 
truths  and  errors,  the  science  has  halted,  if  it  has  only  felt  its  way,  if  its 
gait  has  been  tottering  and  doubtful?"  (p.  14.)  In  his  discussion  he 
promises  his  students  that  he  will  "endeavor  not  to  add  darkness  to 
darkness." 

We  perceive  that  this  is  by  no  means  the  language  of  a  man  who 
had  merely  before  him  the  task  of  teaching  a  settled  science.  And 
although  Say's  system  had  made  the  tour  of  Europe,  and  was  domesti- 

*  The  same  who,  as  Ambassador  of  France,  was  assassinated  in  the  streets 
of  Rome,  on  the  15th  Nov.,  1848. 

f  Cours  d' Economic  Polilique,  par  P.  Rossi;  Tom.  I.,  p.  21 :  Paris,  1843. 


PRELIMINARY    ESSAY.  xliii 

cated  in  the  United  States  as  a  full-blown,  if  not  a  full-ripe,  science. 
By  a  large  number  of  educated  men  it  was  regarded  as  an  established 
department  of  human  knowledge,  and  the  Treatise  of  Say  was  deemed 
its  authoritative  interpreter  :  — 

"  Need  we  blush  for  the  science  if  we  are  obliged  to  avow  in  the  outset 
that  the  first  question  which  meets  us  is,  What  is  Political  Economy?*  — 
And  then,  what  are  its  objects,  its  extent,  its  limits  ?  We  cannot  select  for 
our  consideration  the  more  important  topics  of  Political  Economy  if  we 
are  not  at  first  agreed  as  to  the  nature  and  extent  of  the  science  itself,  and 
yet  it  must  be  admitted  this  agreement  does  not  exist  among  Economists. 
Its  definition  is  to  this  day,  one  of  the  most  controverted  questions  of  the 
science.  Some,  modest  in  appearance  at  least,  assign  it  limits  sufficiently 
restricted  to  be  well  defined ;  the  production  and  distribution  of  riches  is 
with  them  the  whole  field  of  the  science,  —  a  field  which  it  could  not  leave 
without  ceasing  to  be  itself.f  Others  proudly  attempt  to  enlarge  the 
boundaries  and  enrich  the  domain,  by  making  Political  Economy  embrace 
the  whole  interests  of  society,  —  its  organization,  its  tendencies,  arid  its 
progress."  —  (p.  17.) 

"  The  place  it  (Political  Economy)  ought  to  occupy  in  the  domain  of 
social  science,  is  still  (1834)  a  subject  of  doubt  and  dispute  among  Econo 
mists,  and  nothing  yet  promises  an  early  and  satisfactory  decision/'  (p.  18.) 
—  "  The  limits  fixed  by  the  chief  of  the  School  were  soon  transcended ; 
they  were  not  even  respected  by  his  most  zealous  disciples.  I  shall  refer 
now  but  to  three  names  justly  celebrated,  of  whom  one,  although  belonging 
to  a  living  author,  has,  by  the  splendor  which  attaches  to  it,  a  right  to  be 
deemed  an  historical  name.  J  And  first,  my  illustrious  predecessor  J.  B. 
Say.  Although  in  his  Treatise  he  takes  the  position  that  Political  Economy 
is  properly  but  the  science  of  Riches;  what  does  he  say  in  his  "  Complete 
Course  of  Political  Economy?"  I  give  you  his  own  words :  — '  The  object 
of  Political  Economy  seems  hitherto  to  have  been  confined  to  a  knowledge 
of  the  laws  which  regulate  the  formation,  distribution,  and  consumption 
of  riches/  He  acknowledges  that  he  so  regarded  it  in  his  Treatise ;  he 
goes  on  to  say :  —  'It  may  be  seen,  however,  in  this  work,  that  this  science 
pertains  to  everything  in  society,  that  it  embraces  the  entire  social  system/ 

*  In  Say's  life-time,  how  deeply  would  such  a  question,  from  such  a  source, 
have  wounded  him ! 

f  Say  is  here  intended,  but  in  a  way  to  strike  only  the  initiated ;  for,  although 
Say's  definition  included  the  consumption  of  wealth,  Rossi  had  previously  ex 
plained  that  what  is  "called  productive  consumption,  was  nothing  else  than  the 
employment  of  capital." 

%  The  living  author  here  referred  to,  is  Sismondi.  The  other,  is  Storch. 
We  have  already  drawn  so  largely  from  them,  that  we  need  not  repeat  the 
quotations  of  Rossi. 


xliv  PRELIMINAEY    ESSAY. 

This  is  a  virtual  return  to  the  idea  of  the  Physiocrats.  '  It  embraces  the 
entire  social  system.'" —  (p.  23.) 

This  phrase,  comprehensive  enough  to  destroy  the  whole  of  Say's 
system,  could  not  but  strike  the  quick  and  discriminating  mind  of  Rossi, 
who,  if  prevented  by  his  position  from  plainly  saying  so,  could  not  have 
thought  less.  After  citing  passages  from  Sismondi  and  Storch,  Rossi 
remarks  that  Storch's  including  "  civilization"  within  the  domain  of  the 
science,  instead  of  fixing  its  limits,  has  the  effect  of  "  effacing  all  limits." 
Speaking  of  the  principal  Economists,  he  says  further :  "  In  a  general 
survey  of  their  writings,  it  would  be  difficult  to  find  any  two  men  eminent 
in  the  science,  who  agree  as  to  its  nature  or  its  limits.  There  is  then  a 
real  preliminary  question  to  solve,  and  that  is,  to  ascertain  upon  what 
principles  the  problems  of  Political  Economy  ought  to  be  solved."  — 
(p.  25.) 

After  a  series  of  reasonings  and  siftings,  Rossi  ventures  upon  more 
definite  ground :  — 

"  Political  Economy  springs  essentially  from  the  following  data: — Our 
power  over  things  by  means  of  labor ;  our  inclination  to  saving,  if  a  suffi 
cient  interest  stimulates  us ;  our  inclination  to  unite  our  exertions  for  a 
common  purpose ;  our  instincts  of  property  and  of  exchange  or  trade." 
(p.  31.)  —  "  These  are  facts  of  every  time  and  of  every  place ;  these  are 
the  general  facts  of  Political  Economy.  From  these  data  result  the  science 
of  riches,  a  science  rational,  general,  invariable ;  on  the  one  hand,  things 
and  their  properties;  on  the  other,  man,  his  intelligence,  his  physical 
powers  ;  these  elements,  blended  together  by  the  inclinations  and  the  wants 
of  our  nature,  inclinations  and  wants  of  which  the  force  may  vary,  but 
which,  in  some  degree,  are  common  to  the  whole  human  family.  This  sci 
ence,  thus  considered,  has  for  its  theatre  the  whole  world." — (p.  32.) 

We  find  that  Rossi  is  driven,  by  the  severe  process  of  his  rigid 
analysis,  to  the  four  main  facts  he  has  stated.  The  science  becomes 
henceforth,  in  his  view,  one  of  reasoning,  one  of  abstraction,  and  not 
of  induction,  and  of  course  he  is  found  side  by  side  with  Tracy,  Senior, 
and  J.  S.  Mill.  This  is  the  very  reverse  of  the  position  of  J.  B.  Say :  — 

"  Such,"  he  says,  " is  the  science  in  its  generality."  —  "I  boldly  affirm 
that  the  science  of  Political  Economy,  regarded  thus  in  that  which  is  its 
general  and  invariable  aspect,  is  rather  a  science  of  reasoning  than  one 
of  observation.  The  contrary  has  been  asserted  by  those  who,  as  we  shall 
see  directly,  have  blended  rational  Political  Economy  with  Political  Eco 
nomy  applied  —  the  science  with  the  art.  The  science,  properly  so  called, 
is  constructed  upon  a  small  number  of  general  facts ;  it  is  only  by  deduc 
tion  that  it  arrives  at  any  conclusions."  (p.  33.)  —  "Again;  we  have  more 
ends  than  one  to  gain  in  this  world ;  Political  Economy  can  serve  as  a 


PRELIMINARY    ESSAY.  xlv 

guide  in  attaining  only  one  of  these,  and  it  has  no  mission  to  constrain  any 
one  to  do  this  or  to  do  that,  for,  I  repeat  it,  science  has  no  other  direct 
end  but  to  seek  the  truth.  It  is  in  the  application  of  this  truth  that  we 
are  to  keep  our  eyes  upon  all  the  principles  which  concur  in  the  solution 
of  social  questions.  The  error  arises  from  the  supposition  that  every  social 
question  may  be  solved  by  the  application  of  a  single  principle.  It  results 
from  this,  that  whenever  a  principle  of  Political  Economy  is  found  to  be 
involved  in  a  question,  an  attempt  is  made  to  put  the  practical  solution  of 
that  question  to  the  account  of  Political  Economy.  That  is  wrong.  Po 
litical  Economy  only  furnishes  economical  conclusions  —  the  consequences 
of  an  economical  principle.  It  is  for  legislators,  for  men  of  business,  to 
take  account  of  all  the  other  principles  which  should  concur  to  make  the 
solution  of  a  question  conformable  to  the  highest  interests,  whether  of 
nations  or  individuals."  —  "I  say  the  highest  interests :  when,  on  any 
question  the  highest  interest  of  the  nation  is  wealth,  then  Political  Economy 
should  have  the  control ;  when  the  contrary  is  the  case,  when  higher  or 
stronger  interests  are  involved,  as  the  national  dignity,  economical  conside 
rations  are  but  a  secondary  order  of  motives,  and  such  as  must  yield  to 
political  considerations."  —  "I  believe,  then,  that  it  is  proper  to  distinguish 
at  the  outset,  between  rational  Political  Economy  and  applied  Political 
Economy,  and  that  afterwards,  in  every  question  which  arises,  it  is  not 
proper  to  blend  even  considerations  of  applied  Political  Economy  with 
other  considerations,  moral  and  political,  which  control  the  solution  which 
is  required."  — (pp.  39,  40,  41.) 

"  Finally,"  summing  up  his  previous  remarks  on  this  head,  he  ob 
serves  "  that  it  was  not  proper  to  confound  the  results  of  the  science 
of  riches  with  the  requirements  of  morals,  for  the  just  and  the  good 
cannot  coincide  with  the  useful  nor  with  the  exigencies  of  politics,  which 
represent  an  order  of  utilities  superior  in  degree  to  the  utilities  of 
Political  Economy."  —  (p.  44.) 

We  refrain  from  the  remarks  suggested  by  these  passages,  trusting 
that  their  importance  will  not  fail  to  strike  the  attentive  reader.  "We 
have  extended  these  quotations  in  preference  to  occupying  the  space 
with  anything  of  our  own.  If  Rossi's  careful  scrutiny  of  the  state  of 
the  science,  and  if  his  logical  acumen  are  at  all  reliable,  a  great 
task  is  yet  to  be  accomplished  by  Political  Economists  before  their  sci 
ence  assumes  a  position  of  authority.  The  overthrow  of  Say's  system 
has  produced  a  confusion  which  time  and  patience  only  can  remedy.  We 
Bay  the  overthrow  of  his  system,  or  the  main  doctrine  of  his  Treatise, 
for  we  regard  that  as  having  been  effected  by  the  united  labors  of  Count 
Tracy,  Sismondi,  Rossi,  Senior,  and  J.  S.  Mil].  Blanqui  had  foreseen 
that  the  School  of  Sismondi  was  destined  to  supersede  that  of  Say.  But 


xlvi  PRELIMINARY    ESSAY. 

the  coup  dfe  grace  was  given  to  Say's  system  by  the  demonstration  of  the 
four  great  Economists  just  named,  that  Political  Economy  is  an  abstract 
science,  or  a  science  of  reasoning,  and  not  a  science  of  observation  or 
experiment.  In  this  strong  position  Say  had  planted  himself,  in 
voking  the  shade  of  Bacon  to  favor  his  inductive  system  of  Political 
Economy. 

If  Say  has  been  thrust  from  this  position  by  these  great  adversaries, 
his  Treatise  can  no  longer  be  regarded  as  an  expositor  of  science,  but 
must,  as  we  have  already  remarked,  take  its  place  among  numberless 
other  treatises  upon  this  topic,  to  be  regarded  as  a  portion  of  the  mate 
rials  from  which  future  Political  Economists  may  draw  in  the  progress 
of  the  science.  One  more  passage  from  Rossi  before  we  part  with 
him.  After  furnishing  many  illustrations  of  the  difficulties  and  perils 
of  the  science,  he  proceeds :  — 

"  These  instances  inform  us  amply  that  the  gravest  questions  meet  us  on 
the  very  threshold  of  the  science.  They  are  met  in  the  domain  of  the  pure 
science  when  we  attempt  to  ascertain  the  general  facts  on  which  it  is 
founded ;  they  are  met  in  still  greater  force,  as  might  be  expected,  when 
we  descend  from  these  general  facts  to  the  deductions  and  corollaries  which 
are  to  be  derived  from  them.  They  are  met  in  still  greater  number  in  the 
domain  of  Political  Economy  applied,  for  there  they  are  augmented  by  all 
the  contrarieties  in  the  statement  and  observation  of  particular  facts  which 
so  constantly  occur  in  addition  to  what  we  have  already  indicated,  —  those 
legitimate  moral  and  political  influences,  which,  although  strangers  to  the 
science  of  Political  Economy,  yet  mingle  in  its  decisions."  (p.  51.)  —  "  In 
seeking  to  discover  the  true  principles  of  the  science,  and  to  obtain  them 
pure  from  all  alloy,  we  shall  have  more  than  one  error  to  reject,  more  than 
one  theory  to  rectify  or  complete,  and  that  we  may  not  reject  the  authority 
of  reason,  we  must  be  ready  to  decline,  with  respectful  firmness,  the 
authority  of  our  MASTERS."  —  (p.  52.) 

Rossi  observes  too  well  the  decencies  of  his  position  to  attack  more 
openly  the  authority  of  his  predecessor,  whose  son-in-law,  Charles 
Comte,  had  been  his  antagonist  for  the  professorship ;  but  he  is  ever  too 
frank  and  independent  to  leave  his  hearers  in  doubt  of  the  antagonism 
to  Say  indicated  in  the  closing  words  of  the  foregoing  citation. 

The  rise  of  Rossi  in  France,  was  not  only  rapid,  but  high,  and  well 
sustained  by  his  whole  career.  His  abilities  were  regarded  as  of  the 
highest  order  in  a  city  where  there  is  at  all  times  a  congregation  of  the 
first  men  in  the  world.  He  was  looked  upon  in  France  as  one  of  the 
most  eminent  Political  Economists  of  his  day.  "  By  the  clearness  of 
his  mind/'  remarks  J.  Garuier;  one  of  the  most  distinguished  Econo- 


PRELIMINARY    ESSAY. 

mists  of  France,  "the  sagacity  of  his  reason,  the  transparency  and 
elegance  of  his  style,  he  has  elucidated  every  question  he  has  touched, 
and  specially  contributed  to  restore  economical  studies  to  their  proper 
dignity."  "  He  was  one  of  the  finest  intelligences  of  our  time.  France 
has  lost  in  him  a  savant  of  the  first  order."  Mignet  closes  the  eulogy 
of  Rossi  as  a  member  of  the  Academy  of  Moral  and  Political  Sciences, 
with  these  words  :  —  "  He  will  be  known  in  history  by  the  elevation  of 
his  ideas,  the  splendor  of  his  talents,  the  usefulness  of  his  works,  the 
moderation  of  his  conduct,  and  the  grandeur  of  his  end."  * 

*  If  an  examination  of  most  of  the  Treatises  upon  Political  Economy  be 
made  under  the  guidance  of  Rossi's  firmly  established  distinction  between  the 
science  in  the  abstract  and  the  science  applied,  it  exhibits  a  confusion  of  ideas, 
statements,  and  conclusions,  for  which  it  would  be  difficult  to  find  a  parallel. 
The  science  and  the  art,  the  science  abstract  and  the  science  applied,  are  jumbled 
together  in  such  hopeless  conjunction,  that  neither  clear  views  nor  safe  conclu 
sions  seem  possible.  We  have  had  authors,  reviewers,  and  orators  in  abundance, 
who  have  thought  it  sufficient  to  master  a  few  of  the  leading  positions  of  Say 
and  some  of  his  phraseology,  to  enable  them  to  give  law  to  governments  and 
statesmen;  who  applied  the  laws  of  the  so-called  science  as  precepts  of  art 
without  qualification,  and  without  giving  thought  to  numberless  considera 
tions  involving  human  interests  of  various  kinds  and  of  the  highest  import ; 
who  called  upon  legislators  and  authorities,  as  well  as  upon  all  others  interested, 
to  bow  down  to  the  authority  of  the  science ;  who  said  to  rulers,  "  Let  com 
merce  alone;"  to  all  they  said,  "Buy  in  the  cheapest  market;"  "Let  supply 
and  demand  regulate  prices;"  "^There  can  be  no  over-production;"  "Let  trade 
be  free;"  "Obey  these  laws  and  prosperity  will  follow ;  all  will  go  right  with 
the  people."  Now  this  direct  and  naked  application  of  these  general  laws  or 
truths  of  the  science  of  Political  Economy  to  the  affairs  of  nations  or  individuals, 
without  due  consideration  of  the  attending  circumstances,  betrays  ignorance, 
instead  of  knowledge,  and  folly,  instead  of  wisdom.  Say  explained  or  applied 
his  system  in  a  work  larger  than  his  system  itself.  His  disciples  apply  his 
system  without  the  least  reserve,  without  a  word  of  explanation  or  alleviation. 
The  results  have  in  many  cases  shown  the  most  disastrous  quackery  the  world 
has  ever  seen.  Rossi  has  distinctly  placed  the  responsibility  upon  statesmen,  and 
not  upon  Political  Economists ;  he  has  exalted  their  responsibilities  who 
have  the  welfare  of  the  people  in  their  charge,  far  above  the  efforts  of  those 
who  are  endeavoring  to  state  the  abstractions  of  science ;  he  holds  that  the  states 
man  who  only  regards  the  science  of  Political  Economy  as  one  of  the  numberless 
guides  he  has  to  consult  in  ascertaining  a  safe  and  wise  national  policy,  would 
be  guilty  of  great  neglect  of  duty,  if  he  were  to  shut  his  eyes  and  ears  to  all 
dictates  but  those  of  the  science  of  Political  Economy.  The  extent  to  which 
this  blind  subserviency  to  the  abstractions  of  Political  Economy  has  been  urged 
upon  the  public  in  books  and  speeches,  would  be  amusing  if  it  had  never  been 
successful.  These  simple  laws  of  Political  Economy  were  so  easily  understood, 


xlviii  PRELIMINARY    ESSAY. 

TVe  are  compelled,  for  want  of  space,  to  return  again  to  the  Political 
Economists  of  Great  Britain,  although  it  would  be  both  instructive  and 
interesting  to  have  pursued  our  studies  among  those  of  France.*  The 
writings  of  DAVID  RICARDO  gave  a  great  impulse  to  economical  studies. 
His  publication  of  "The  Principles  of  Political  Economy  Taxation" 
in  1817,  gave  him  at  once  a  high  rank  among  the  thinkers  and  writers 
of  that  day.  His  range  of  inquiry  was  not  comprehensive,  his  efforts 
being  confined  more  to  correcting  the  errors  of  others  than  to  the  con 
struction  of  any  systematic  work.  He  demonstrated  to  the  satisfaction 

the  prevalent  teaching  of  Say's  system  having  contributed  to  give  them  extended 
circulation,  that  they  took  possession  of  the  public  mind  to  a  wide  extent,  and 
were  by  multitudes  looked  upon,  not  merely  as  truths  of  a  settled  science,  but 
precepts  evincing  the  profoundest  skill  in  government.  The  tone  of  superior 
knowledge  assumed  by  those  who  were  most  affected  by  this  delusion,  was  fre 
quently  ridiculous  in  the  highest  degree.  The  British  journals  furnish  some 
exquisite  specimens  of  this  mode  of  teaching  Political  Economy ;  so  also  do 
many  of  the  continental  periodicals,  but  chiefly  the  "Journal  des  Economises  " 
But  if  we  were  to  go  into  particulars  of  this  false  teaching,  we  could  find  no 
richer  mine  than  the  "Southern  Review,"  of  our  own  country  —  whilst  in  this 
Review  are  many  papers  from  which  we  might  dissent  more  or  less,  yet,  with  a 
high  opinion  of  the  powers  and  acquirements  of  the  writers,  there  are  others 
of  a  character  so  different  as  to  create  surprise  that  they  could  find  admission 
into  such  a  periodical.  These  articles  probably  emanated  from  one  source,  for  it 
would  be  difficult  to  find  their  parallel  in  flippancy,  shallowness,  and  inordinate 
self-complacency.  This  "Southern  Reviewer"  (we  trust  there  is  but  one),  armed 
like  a  porcupine  at  all  points,  lets  off  a  shower  of  smart  things  when  any  one 
approaches  his  domain  of  Political  Economy,  or  steps  upon  his  little  nest  of 
straws  gathered  from  Adam  Smith  and  J.  B.  Say.  This  writer  (assuming  there 
is  but  one),  winds  up  a  review  of  one  of  H.  C.  Carey's  works,  which,  in  his  in 
effable  self-conceit,  he  imagines  himself  to  have  utterly  demolished  with  a  story, 
in  the  application  of  which  he  plays  the  part  of  General  Jackson  and  the  victo 
rious  Americans  at  New  Orleans,  and  gives  to  Mr.  Carey  that  of  the  routed  and 
used-up  British  army.  The  modesty  and  good  taste  of  this  application  may  be 
fairly  taken  as  the  measure  of  the  writer's  knowledge  of  Political  Economy,  and 
his  capacity  for  deciding  upon  such  works.  Mr.  Carey's  reputation  as  a  Political 
Economist  in  Europe  and  America,  is  far  beyond  the  reach  of  the  sapient  writer 
in  the  "Southern  Review,"  whose  knowledge  of  Political  Economy  is  not  suffi 
cient  to  inform  him  that,  whilst  he  was  revelling  in  the  conscious  delight  of 
having  used  up  Mr.  Carey's  works,  they  were  being  translated  into  various  lan 
guages  of  Europe,  and  were  placing  their  author  at  the  head  of  a  distinct  School 
of  Economists,  respectable  at  once  for  numbers  and  intelligence,  both  abroad 
and  at  home. 

*  There  are  many  eminent  Political  Economists  in  France  whom  we  do  not 
notice  in  this  sketch. 


PRELIMINARY    ESSAY.  xlix 

of  the  leading  Economists  that  Adam  Smith's  theory  of  value  was 
defective.  He  had  a  controversy  with  Say,  which  did  not  terminate  to  the 
full  satisfaction  of  either  party.  He  adopted  the  theory  of  Rent,  attri 
buted  to  West;  Malthus  and  Anderson,  made  it  a  hinge  on  which  many 
of  his  special  views  turned,  and  employed  it  so  constantly  in  his  reason 
ings,  that  it  is  often  called  Ricardo's  theory.  It  is  the  same  which  has 
been  attacked  with  such  power  and  success  by  our  eminent  Economist, 
H.  C.  Carey.  It  is  doubtful  where  Ricardo  will  be  placed  in  the  final 
adjustment  of  this  vexed  and  unsettled  subject,  but  his  writings  must 
be  always  valuable  to  those  who  may  continue  the  effort  to  construct 
a  pure  science  of  Political  Economy.  They  do  not  come  within  the 
range  of  our  present  inquiries,  because  they  do  not  profess  to  embrace 
the  whole  science.  In  the  preface  to  his  Principles,  however,  Ricardo 
gives  us,  if  not  a  definition,  at  least  an  indication  of  his  view  of  the 
scope  of  Political  Economy.  "  The  produce  of  the  earth, — all  that  is 
derived  from  its  surface  by  the  united  application  of  labor,  machinery 
and  capital,  —  is  divided  among  three  classes  of  the  community; — the 
proprietor  of  the  land  j  the  owner  of  the  stock  or  capital  necessary  for  its 
cultivation;  and  the  laborers  by  whose  industry  it  is  cultivated."  "To 
determine  the  laws  which  regulate  this  distribution  is  the  principal 
problem  in  Political  Economy ;  much  as  the  science  has  been  improved 
by  the  writings  of  Turgot,  Stuart,  Smith,  Say,  and  Sismondi,  they  afford 
very  little  satisfactory  information  respecting  the  natural  course  of  rent, 
profit  and  wages."  Ricardo  informs  his  readers  in  many  other  places, 
that  he  was  far  from  being  satisfied  with  Political  Economy  as  it  stood 
in  his  day.  The  whole  tenor  of  his  works  shows  a  fondness  for  close 
and  severe  abstraction,  confining  and  narrowing  his  views  to  the  mere  sub 
ject  of  wealth,  which  he  does  not  consider  in  its  connection  with  human 
welfare.  His  perfect  coolness  in  the  discussion  of  the  subject,  may  be 
seen  in  his  definition  of  the  natural  price  of  labor,  as  "that  price 
which  is  necessary  to  enable  the  laborers,  one  with  another,  to  subsist 
and  perpetuate  their  race  without  either  increase  or  diminution."  One 
with  another,  that  is,  a  kind  of  average  chance  of  living  or  not  starving 
is  regarded  as  all  that  the  natural  price  of  labor  gives  to  the  working- 
man  !  This  is  one  of  the  laws  of  that  science  of  wealth  which  regards 
man  as  merely  a  producer. 

In  1820,  the  REV.  T.  R.  MALTHUS,  previously  distinguished  as  the 
author  of  the  celebrated  work  on  Population,  published  his  Principles 
of  Political  Economy,  considered  with  a  view  to  their  practical  Applica 
tion.  He  was,  at  that  time,  Professor  of  that  Science  in  the  East  India 


1  PRELIMINARY    ESSAY. 

College.  The  introduction  reveals,  modestly  but  distinctly,  the  fact  that 
he  is  far  from  content  with  the  actual  state  of  Political  Economy.  He 
represents  nearly  all  its  important  positions  as  controverted.  "  There 
are,  indeed,  great  principles  to  which  exceptions  are  rare/' — "but  even 
these,  when  examined,  will  be  found  to  resemble  in  most  particulars,  the 
great  general  rules  in  morals  and  politics,  founded  on  the  known  passions 
and  propensities  of  human  nature,"  —  "  and  we  shall  be  compelled  to 
acknowledge  that  the  science  of  Political  Economy  bears  a  nearer  resem 
blance  to  the  science  of  morals  and  politics,  than  to  that  of  mathema 
tics." — «  Among  those  writers  who  have  treated  the  subject  scientifically, 
there  is  not,  perhaps,  at  the  present  moment,  so  general  an  agreement 
as  would  be  desirable  to  give  effect  to  their  conclusions."  He  re 
garded  the  subject  as  too  unsettled  then,  to  admit  of  a  "new  syste 
matic  treatise."  He  thought  the  various  subjects  of  Political  Economy 
had  better  be  treated  singly,  until  the  discussion  and  "collision  of 
opinions,  and  the  appeal  to  experience  separates  the  true  from  the  false, 
and  then  the  different  parts  may  be  combined  into  a  consistent  whole, 
which  may  carry  with  it  such  weight  and  authority,  as  to  produce  the 
more  useful  practical  results."  "  The  treatise  which  we  already  possess, 
is  still  of  the  very  highest  value,  and  till  a  more  general  agreement  shall 
be  found  to  take  place,  both  with  respect  to  the  controverted  points  of 
Adam  Smith's  work,  and  the  valuable  extent  of  the  additions  to  it," 
he  recommends  that  the  "different  subjects  which  admit  of  doubt  should 
be  treated  separately."*  This  is  certainly  disposing  of  the  great  preten 
sions  of  J.  B.  Say  very  summarily ;  the  first  edition  of  his  treatise  had 
appeared  in  1803,  and  the  second  in  1815.  It  may  not  have  been  in 
tended  as  a  slight  thus  to  pass  over  the  work  of  Say,  but  if  not  so  in 
tended,  it  is  impossible  to  avoid  the  conclusion  that  it  was  not  regarded 
as  occupying  the  position  claimed  for  it  by  Say  and  his  school.  Say 
subsequently  addressed  five  letters  to  Malthus,  in  which,  though  he  could 
not  complain  of  this  slight,  he  very  decidedly,  but  in  very  courteous 
terms,  dissented  from  his  doctrines.  It  is  plain  that  Malthus  did  not 
regard  the  science  as  by  any  means  so  complete  as  claimed  by  Say  then, 
and  his  disciples  since.  He  speaks  of  it  as  "  manifestly  incomplete." 
He  says,  "  It  is  impossible  to  observe  the  great  events  of  the  last  twenty- 
five  years  in  their  relation  to  Political  Economy,  and  sit  down  satisfied 
with  what  has  been  already  done  in  the  science."  The  whole  work  of 

*  These  passages  are  taken  from  the  Introduction  to  the  Principles  of  Politi 
cal  Economy,  by  T.  R.  Malthus.     Second  edition,  London,  1836. 


PRELIMINARY    ESSAY.  11 

Malthas  is,  in  a  considerable  degree,  a  development  of  the  opinions  just 
cited,  but  no  small  part  is  devoted  to  the  differences  between  him  and 
Mr.  Ricardo. 

JAMBS  MILL,  the  author  of  a  history  of  British  India,  published  his 
"  Elements  of  Political  Economy"  in  1821.  He  treated  the  science  as 
being  more  advanced  than  was  admitted  by  Malthus,  and  the  object  of 
his  small  volume  was  to  furnish  such  a  summary  as  would  be  suitable 
for  schools.  McCulloch  says  of  this  work,  that  it  is  "  a  resume  of  the 
doctrines  of  Smith  and  Ricardo  with  respect  to  the  production  and  dis 
tribution  of  wealth,  and  of  those  of  Malthus  with  respect  to  popula 
tion." — "  But  it  is  of  too  abstract  a  character  to  be  either  popular  or  of 
much  utility."  —  "  The  science  is  very  far  from  having  arrived  at  the 
perfection  which  Mr.  Mill  supposed."*  It  is  observable  that  Say  is 
again  overlooked  in  a  general  survey  and  summary  of  the  science.  Mr. 
Mill  confines  his  view  to  the  works  of  Adam  Smith,  Ricardo  and  Mal 
thus.  Perhaps  no  two  works  have  been  more  found  fault  with  than  the 
former,  and  upon  no  book  extant  are  the  opinions  of  intelligent  men 
more  divided  than  on  that  of  Malthus  on  Population. 

In  1821,  appeared  an  "  Essay  on  the  Production  of  Wealth"  by«* 
R.  TORRENS,  who  has,  since  that  time,  continued  to  be  a  writer  uporr 
subjects  of  Political  Economy.  His  works  have  always  commanded 
attention  and  respect.  This  too  was  an  attempt  to  produce  a  systematic 
treatise  upon  a  subject  which  he  regarded  as  far  more  advanced  towards 
the  certainties  of  science,  than  its  subsequent  history  has  justified. 
Col.  Torrens  ventures  the  prediction,  that  twenty  years  will  leave 
"  scarcely  a  doubt  of  its  fundamental  principles."  This  shows  that  he 
had  no  idea  of  the  obstacles  which  were  obstructing  the  progress  of 
Political  Economy.  He  must  be  a  hopeful  student  who  will  now  say 
that  the  science  will  be  reduced  to  certainty  within  half  a  century  from 
the  date  of  Col.  Torrens's  prediction.  And  many  are  now  confident  it 
never  can  be  settled  upon  the  basis  upon  which  he  treated  it.  After 
some  criticisms  upon  Smith,  Ricardo  and  Malthus  in  his  preface,  he 
infers  that  a  "  general  treatise  upon  Political  Economy,  combining  with 
the  principles  of  Adam  Smith  so  much  of  the  more  recent  doctrines  as 
may  be  conformable  to  truth,"  —  "is  a  desideratum  in  our  literature." 
His  work  is  not  founded  upon  that  of  Say,  to  whom,  however,  he  refers, 
and  from  whom  he  takes  some  of  the  positions  included  in  his  work. 
He  distinctly  points  out  and  rejects,  some  of  Say's  doctrines.  His  pre- 

*  Literature  of  Political  Economy,  p.  17. 


Hi  PRELIMINARY    ESSAY. 

face  specifies  many  errors  of  previous  economists,  as,  in  part,  a  reason 
for  the  production  of  his  systematic  treatise.  After  all  this  effort,  pro 
bably  there  are  few  of  the  many  pamphlets  published  by  Col.  Torrens, 
which  have  not  been  more  read  and  appreciated  than  this  treatise.  It 
has  never  been  acknowledged  as  a  satisfactory  work  upon  Political 
Economy,  and  has  long  since  been  placed  on  the  list  of  the  unsuccessful 
efforts  to  settle  this  subject.  We  cannot  but  say  in  passing,  that  an 
undertaking  in  which  men  of  such  undoubted  talent  as  Ricardo,  Mal- 
thus,  James  Mill  and  Col.  Torrens,  fail  signally,  must  be  difficult  indeed. 
True,  their  failure  is  only  partial — they  have  failed  in  settling  the  science 
of  Political  Economy,  but  their  works  are  of  value  as  contributions  to 
the  subject.  Their  failure  is  calculated  to  awaken  doubts  whether  the 
elements  of  a  science  can  be  well  chosen  when  such  men  cannot  suc 
ceed  in  a  satisfactory  development.  We  cannot  but  think  their  labors 
would  now  be  more  valuable,  if  each  one  had  set  out  in  his  speculations 
unembarrassed  by  those  of  any  previous  writer 

No  Political  Economist,  for  the  last  thirty  years,  has  been  more  pro 
minent  than  J.  R.  McCuLLOCH,  the  author  of  the  article  on  Political 
Economy  in  the  Supplement  to  the  Encyclopedia  Brittanica,  which  was 
published  separately,  with  additions,  in  1825.*  Since  that  time  he  has 
published  a  Dictionary  of  Commerce  and  Navigation;  A  Statistical 
*  Account  of  the  British  Empire ;  A  new  Edition  of  Smith's  Wealth  of 
Nations,  with  an  Introduction,  Notes  and  Supplementary  Dissertations ; 
A  Treatise  on  Taxation ;  The  Literature  of  Political  Economy ;  A  His 
tory  of  Commerce;  Treatises  on  Economical  Policy;  Essays  on  Inte 
rest,  Exchange  and  Money ;  and  many  other  important  works.  Besides 
these,  McCulloch  has  been  a  large  contributor  to  the  Edinburgh  Review 
on  the  topic  of  Political  Economy,  and  is  the  author  of  many  pamphlets 
on  that  subject.  These  voluminous  works,  some  of  which  are 
standard  authorities,  and  found  in  the  hands  of  multitudes  who 
give  no  attention  to  Political  Economy  as  such,  have  made  McCulloch 
more  known  than  any  economist  of  his  time.  It  cannot  but  be  ad 
mitted,  that  the  course  of  his  studies  has  made  him  better  acquainted 
with  the  facts  and  events  connected  with  labor,  commerce,  money  and 
wealth,  than  any  other  writer  upon  the  subject  of  Political  Economy. 
His  Geographical  Dictionary;  his  Commercial  Dictionary;  his  Statis 
tical  Account  of  the  British  Empire,  brought  distinctly  and  fully  before 
him  the  great  facts  of  industrial  and  commercial  progress;  his  Litera- 

*  The  fourth  edition  greatly  enlarged,  appeared  in  1849. 


PRELIMINARY    ESSAY.  liii 

ture  of  Political  Economy,  and  his  numerous  Reviews,  brought  before 
him  very  fully  the  whole  authorship  of  Political  Economy ;  so  far,  there 
fore,  as  preparation  goes,  it  must  be  conceded  that  McCulloch  was  well 
fitted  to  speak  on  the  subject,  and  fairly  entitled  to  be  heard.  It  be 
comes  a  matter  of  interest  to  know  where  a  man  of  such  advantages 
has  taken  his  stand,  and  on  what  side  he  has  declared  himself  upon  topics 
so  controverted.  It  is  quite  impossible  here  to  furnish  the  reader  with 
any  adequate  view  of  McCulloch's  opinions  upon  the  more  important 
points  of  Political  Economy.  We  find  no  difficulty  in  ascertaining  that 
he  walks  not  in  the  footsteps  of  Smith  or  Say,  and  that  he  is  under  few 
obligations  to  them.  Say's  treatise  being  an  attempt  to  construct  a 
pure  science  of  Political  Economy,  was  never  regarded  with  favor  by 
McCulloch,  nor  indeed,  as  we  have  seen  by  other  British  Economists, 
who,  whatever  praise  they  accorded  to  Say,  did  not  acknowledge  the 
claim  of  his  system  to  be  what  it  purported  to  be. 

McCulloch  belongs  neither  to  the  School  of  Say  nor  to  the  still  more 
refined  and  strict  School  of  Tracy,  Rossi,  and  Senior.  He  persists  in 
considering  all  the  topics  of  Political  Economy  from  a  practical  point 
of  view.  He  speaks  of  the  science,  it  is  true,  but  only  in  that  popular 
sense  in  which  men  speak  of  the  science  of  politics,  which  is  a  very 
different  sense  from  that  in  which  it  is  employed  by  Rossi,  Senior,  and 
J.  S.  Mill.  "  The  Economist,"  says  McCulloch,  in  the  Preface  to  the 
third  edition  of  his  "Principles"  "who  confines  himself  to  the  mere 
enunciation  of  general  principles  or  abstract  truths,  may  as  well  address 
himself  to  the  pump  in  Aldgate,  as  to  the  British  public.  If  he  wish 
to  be  anything  better  than  a  declaimer,  or  to  confer  any  real  advantage 
upon  any  class  of  his  countrymen,  he  must  leave  general  reasoning,  and 
show  the  extent  of  the  injury  entailed  upon  the  community  by  the 
neglect  of  his  principles."  In  the  same  preface,  he  says  that  Mr.  Senior 
is  in  error  in  affirming  "  that  the  facts  on  which  its  general  principle ; 
rest  may  be  stated  in  a  very  few  sentences,  or  rather,  in  a  very  few 
words,  and  that  the  difficulty  is  merely  in  reasoning  from  them."  — 
"We  greatly  doubt  whether  the  general  principles  can  be  so  easily 
established  as  Mr.  Senior  supposes."  —  "Mr.  Senior,  the  ablest  and 
most  distinguished  defender  of  what  may  be  called  the  restricted  system 
of  Political  Economy,  says  '  that  wealth,  not  happiness/  is  the  subject 
with  which  the  Economist  has  to  deal."  McCulloch  contends  that  in 
speaking  of  wealth  a  'certain  latitude  must  be  allowed,  or  if  not,  the 
Economist  will  have  "done  little  more  than  announce  a  few  barren 
generalities  of  no  real  utility."  It  is  quite  evident  that  McCulloch  does 


liv  PRELIMINARY    ESSAY. 

not  appreciate  the  $wttij£tiqn  upon  which  his  compeers  insist,  between 
science  and  art?  anol  tha$  for  want  of  this  appreciation  there  is  great 
confusion  of  "ideas  in  the-  introduction  to  his  "  Principles."  And  indeed, 
the  sameic6nfu^iQii*.fo.lbws  him  wherever  he  indulges  in  remarks  about 
the  scierfce!  *  He*  loves ^o  regard  Political  Economy  as  a  science,  but 
not  such  a>  science  as  Say  develops,  nor  such  as  that  of  Rossi  or  Senior. 
It  is  apparent,  in  fact,  that  McCulloch  produced  his  first  work  more 
under  the  influence  of  this  idea  of  science  than  is  exhibited  in  later 
productions.  It  would  be  easy  to  point  out  inconsistencies  arising  from 
this  change ;  but  they  are  to  be  found  throughout  his  works  wherever 
he  endeavors  to  give  his  speculations  on  the  subject  of  Political  Eco- 
i  nomy  a  scientific  form,  or  connect  them  with  the  science.  His  real 
merit  consists  in  his  acquaintance  with  the  subject  on  which  he  writes, 
his  faults  and  inconsistencies  arise  from  his  concessions  to  a  science 
which  did  not  exist,  and  could  not  upon  the  elements  which  were  in  his 
mind. 

The  change  of  McCulloch's  views  between  his  earlier  and  later  career, 
may  be  estimated  by  the  following  extracts :  —  "  But  the  errors  with 
which  this  science  was  formerly  infected,"  (Introduction  to  "Princi 
ples"  published  in  1828),  "are  now  fast  disappearing;  and  a  few  observa 
tions  will  suffice  to  show  that  it  really  admits  of  as  much  certainty  in 
its  conclusions  as  any  science  founded  on  fact  and  experiment  can  pos 
sibly  do."  From  the  preface  to  the  third  edition  of  the  same  work, 
published  in  1842,  we  take  the  following :  —  "  Notwithstanding  the 
pretensions  so  frequently  put  forward  by  Politicians  and  Economists, 
some  of  the  more  interesting  portions  of  the  sciences  which  they  profess, 
are  still  very  imperfectly  understood  ;  and  the  important  art  of  applying 
them  to  the  affairs  of  mankind,  so  as  to  produce  the  greatest  amount  of 
permanent  good,  has  made  but  little  progress,  and  is  hardly,  indeed, 
advanced  beyond  infancy.  Initiates  nos  credimus  dum  in  vestibulo 
hceremus."  • —  "  However  humiliating  the  confession,  it  is  certainly  true, 
that  owing  to  the  want  of  information,  not  a  few  of  the  most  interesting 
problems  in  economical  legislation  are  at  present  all  but  insoluble,  and 
it  must  be  left  to  the  Economists  of  future  ages,  who  will  no  doubt  be 
able  to  appeal  to  principles  which  have  not  yet  developed  themselves,  to 
perfect  the  theoretical,  and  to  complete,  or  reconstruct  the  practical 
part  of  the  science."  These  two  passages  keep  their  place  in  the  fourth 
edition,  1849. 

To  show  that  he  does  not  accept  the  celebrated  maxim  of  the  Physio 
crats,  and  which  afterwards  became  the  central  doctrine  of  Say's 


P  R  E  L  I  M  I  X  A  R  Y    E  S  S  A  Y  .  ly 


School,  Laisscz  faire,  lai&sez  passer,  McCuH^B^Ijte&i^s  in  the  third 
edition  of  his  "  Principles"  a  whole  chapter  Jin  wn?Gjyl£fc  elaborately 
argues  the  right  of  government  to  interve^eJfc/J^attars*S^private  con 
cern,  for  individual,  as  well  as  for  public\  ^d^^tjj  Be,^*  treated 
Political  Economy  it  is  inseparable  from  Polit^^altfequ^J^lsiiakes  the 
attempt  to  distinguish  them.  So  far  as  the  scierKijT^f  l^^ticaJ^Economy  w 
is  concerned,  it  has  suffered  greatly  in  the  hands  of"Mc6uTloch  ;  but  so 
far  as  Economical  knowledge  is  concerned,  his  contributions  are  of  more 
value  than  those  of  any  other  Economist,  and  even  of  many  of  them 
combined.  His  writings  .will  be  consulted  with  advantage  when  very 
many  of  the  treatises  upon  Political  Economy  will  only  keep  their  places 
on  the  shelves  of  libraries  as  events  in  its  history.* 

We  have  already  spoken  in  high  terms  of  N.  W.  SENIOR,  the  author 
of  many  publications  upon  Political  Economy.  That  which  we  shall 
now  notice  is  the  one  in  which  he  summed  up  his  views  with  much 
clearness.  It  was  first  published  as  the  article  on  Political  Economy, 
in  the  "Encyclopedia  Metropolitan]"  in  1835,  and  subsequently  in  a 
separate  form.  In  the  scientific  distribution  of  that  great  work  it  was 
placed  among  the  "  pure  sciences."  It  was  no  doubt  the  intention  of 
the  writer  of  the  article  to  keep  within  the  bounds  of  pure  science  :  if 
he  has  not  succeeded,  he  has  at  least  shown  the  great  error  of  those 
who  called  Political  Economy  a  science,  and  treated  it  without  any  re 
gard  to  the  primary  idea  of  a  science.  In  the  form  of  this  work,  con 
sidering  his  aim,  Senior  has  shown  himself  superior  in  distinctness  and 
power  of  generalization,  to  the  author  of  any  other  system  of  Political 
Economy.  In  special  points  he  may  have  been  surpassed  by  Rossi. 
After  having  in  his  Introduction  restricted  his  subject  to  Wealth,  he 
adds,  "  The  questions,  To  what  extent,  and  under  what  circumstances, 
is  the  possession  of  wealth,  on  the  whole,  beneficial  or  injurious  to  its 
possessor,  or  to  the  society  of  which  he  is  a  member  ?  What  distribution 
of  wealth  is  most  desirable  in  each  different  state  of  society  ?  And  what 
are  the  means  by  which  any  given  country  can  facilitate  such  a  distribu 
tion  ?  all  these  are  questions  of  great  interest  and  difficulty,  but  no 
more  form  a  part  of  the  science  of  Political  Economy,  in  the  sense  in 

*  Our  commendation  of  McCulloch  is  not  without  knowledge  of  the  attack  to 
which  he  exposed  himself;  and  which  appeared  with  the  title,  "Some  Illustrations 
of  Mr.  McCullocWs  Principles  of  Political  Economy,  by  Mordecai  Mullion,"  1826.  We  > 
had  frequently  noticed  the  facts  there  dwelt  upon,  but  without  that  asperity  of 
feeling  which  is  displayed  by  him,  who  takes  the  nom  du  guerre  of  M.  Mullion, 


Ivi  PRELIMINARY    ESSAY. 

which  we  use  that  term,  than  Navigation  forms  a  part  of  Astronomy." 
The  science  in  his  hands  is  not  of 

"  Happiness,  but  wealth ;  his  premises  consist  of  a  very  few  general 
propositions,  the  result  of  observation  or  consciousness,  and  scarcely  re 
quiring  proof,  which  almost  every  man,  as  soon  as  he  hears  them,  admits 
as  familiar  to  his  thoughts ;  and  his  inferences  are  nearly  as  general,  and 
if  he  has  reasoned  correctly,  as  certain,  as  his  premises.  Those  which  re 
late  to  the  nature  and  the  production  of  wealth,  are  universally  true  ;  and 
though  those  which  relate  to  the  distribution  of  wealth  are  liable  to  be 
affected  by  the  peculiar  institutions  of  particular  countries ;  in  the  cases, 
for  instance,  of  slavery,  legal  monopolies,  or  poor-laws,  the  natural  state 
of  things  can  be  laid  down  as  the  general  rule,  and  the  anomalies  produced 
"by  particular  disturbing  causes,  can  be  afterwards  accounted  for.  But  his 
conclusions,  whatever  be  their  generality  and  their  truth,  do  not  authorize 
him  to  add  a  single  word  of  advice.  That  privilege  belongs  to  the  writer 
or  statesman  who  has  considered  what  may  promote  or  impede  the  general 
welfare  of  those  whom  he  addresses,  not  to  the  theorist  who  has  considered 
only  one,  though  among  the  most  important,  of  those  causes.  The  business 
of  a  Political  Economist  is  neither  to  recommend,  nor  to  dissuade,  but  to 
state  general  principles,  which  it  is  fatal  to  neglect,  but  neither  advisable, 
nor  perhaps  practicable,  to  use  as  the  sole,  or  even  the  principal  guides  in 
the  actual  conduct  of  affairs."  Mr.  Senior  is  well  aware,  however,  of  the 
"  imperfect  state  of  the  science,  although,  long  and  intensely  studied." 

One  of  his  prominent  objects  in  the  work  before  us  was  to  improve 
the  nomenclature  of  the  science,  which  he  admits  to  be  in  a  very  bad 
condition.  "  The  English  work  which  has  attracted  the  most  attention 
during  the  present  century,  Mr.  Ricardo's  "Principles,  &c.,"  is  de 
formed  by  a  use  of  words  so  unexplained,  and  yet  so  remote  from  ordi 
nary  usage  and  from  that  of  other  writers  on  the  same  subject,  and 
frequently  so  inconsistent,  as  to  perplex  every  reader,  and  not  unfre- 
quently  to  have  misled  the  eminent  writer  himself."  * 

These  passages  suggest  an  obvious,  but  important  remark,  applicable 
to  all  the  writings  upon  Political  Economy :  very  great  confusion  of 
ideas,  premises,  and  conclusions,  exists  not  only  in  works  upon  that 
subject,  owing  to  the  very  general  disregard  of  the  distinction  between 
science  and  art,  but  also  to  the  disregard  of  the  corresponding  distinction 
between  men  who  are  qualified  to  instruct  us  in  science  and  those 
who  are  qualified  to  teach  us  art ;  between  the  men  who  may  be  qualified, 
by  their  powers  of  reasoning,  observation,  and  logical  discrimination,  to 

*  These  citations  are  from  the  Introduction  to  Political  Economy,  by  N.  W. 
Senior. 


PKELIMINARY    ESSAY.  Ivii 

perceive  and  state  those  few  main  propositions  or  generalizations,  which 
are  the  alleged  elements  of  the  science  of  Political  Economy,  and  those 
who,  while  they  can  readily  comprehend  the  import  and  teaching  of 
these  general  propositions,  can,  from  their  experience  of  the  world,  ein-  « 
ploy  them  in  connection  with  all  the  facts  and  considerations  touching 
public  and  individual  welfare,  which  go  to  influence  the  minds  of  states 
men  and  legislators.  Now,  according  to  an  illustration  of  Senior,  a 
writer  may  be  master  of  the  science  of  Political  Economy,  but  be  as  unfit 
to  be  a  Statesman  as  a  mere  Astronomer  would  be  to  navigate  a  ship. 
It  will  scarcely  be  denied,  we  presume,  that  whatever  knowledge  of  the 
science  of  Political  Economy  was  possessed  by  a  large  majority  of  the 
writers  upon  that  subject,  very  few  could  lay  any  pretensions  to  being 
statesmen.  Adam  Smith  was  a  College  Professor,  and  so  have  been  most 
of  these  writers  since  his  day.  The  life  of  a  professor  may  be  favorable 
to  intellectual  studies,  but  it  certainly  is  not  an  adequate  preparation 
for  statesmanship.  We  think  then  that  the  conclusions  of  Political 
Economy  have  been  pressed  upon  the  attention  of  nations  and  public 
men,  with  a  zeal  and  an  importunity  in  the  inverse  ratio  of  their  impor 
tance.  The  men  who  have  attempted  to  elaborate  the  science  of  Politi 
cal  Economy,  have  been  more  or  less  successful,  as  may  be  variously 
judged  by  those  who  review  their  labors;  but  clearly,  the  men  who  have 
attempted  to  apply  these  unsettled  principles  to  the  actual  affairs  of  nations 
have  been  unsuccessful,  both  because  the  principles  to  be  applied  were 
uncertain,  and  because,  if  these  principles  had  been  ever  so  clear,  the 
parties  making  the  attempt  had  not  the  requisite  practical  knowledge 
to  enable  them  to  make  the  application.  If  these  principles  were  not 
only  well  defined,  but  admitted,  they  would  form  but  a  very  small  part 
of  the  knowledge  needful  for  wise  and  successful  statesmanship.  Not 
withstanding  these  reasons  for  modesty  in  the  application  of  the  prin 
ciples  of  Political  Economy,  there  has  been  no  quarter  from  which  the 
ear  of  public  men  has  been  more  assailed  than  from  recluse  fledglings  of 
this  science.  How  many,  ignorant  of  Senior's  advice,  but  having  got 
hold  of  some  of  those  general  propositions  which  he  announced,  have 
regarded  themselves  as  not  only  qualified  to  advise  all  men  in  high  sta 
tion,  but  to  undertake  the  government  of  any  nation  or  all  nations ! 
The  truth  is,  not  a  few  of  this  School  announce  the  doctrine  of  free 
trade  as  sufficient  to  cover  the  whole  ground  of  human  welfare.  The 
question  of  free  trade  belongs  not  to  the  science  of  Political  Economy, 
according  to  the  theory  of  Senior,  Kossi  and  Tracy,  but  to  the  conside 
ration  of  the  statesman,  or  the  domain  of  government  and  politics ;  and  *• 
3 


Ivili  PRELIMINARY    ESSAY. 

all  that  Political  Economists  have  urged  on  that  subject  has  been  ex 
cathedra. 

The  most  important  work  published  in  England  recently  upon  the  sub 
ject  of  Political  Economy,  is  that  of  J.  STUART  MILL,  entitled,  "Prin 
ciples  of  Political  Economy,  with  some  of  their  applications  to  Social  Phi 
losophy/7  which  appeared  in  two  large  volumes,  8vo.,  in  1848.  We  have 
already  made  the  name  and  some  of  the  labors  of  J,  S.  Mill,  familiar 
to  our  readers.  We  regard  him  as  eminently  qualified  to  pursue  the  sub 
ject  of  Political  Economy,  with  a  view  to  ascertain  its  actual  condition 
as  a  science,  and  the  claims  of  the  various  writers  to  authority.  By 
referring  to  the  citations  already  made  from  a  former  work,  the  pre 
cision  of  his  language  and  the  closeness  of  his  thinking,  will  be  seen. 
His  work  on  rationative  and  inductive  logic,*  a  treatise  of  high  repute, 
is  a  further  warrant  for  his  capacity  to  pursue  the  science  of  Political 
Economy  as  he  understood  it ;  the  doubt  which  meets  us  in  taking  up 
this  voluminous  effort  is,  whether  J.  S.  Mill  was  a  practical  statesman. 
We  see  that  he  has  undertaken  to  deal  with  the  application  of  the 
science ;  but  it  is  true,  his  application  is  not  said  to  be  to  the  actual  affairs 
of  life  and  of  nations,  but  to  Social  Philosophy.  If  this  phrase  means 
or  includes  the  art  of  government,  then  he  has  undertaken  the  regular 
application  of  the  science.  Now  the  confidence  which  we  might  accord 
to  Mr.  Mill  in  logic,  in  mental  science,  in  criticism,  abandons  us  when 
he  enters  upon  a  career  demanding  such  large  experience  of  public  life 
and  national  affairs,  as  this  application  of  Political  Economy.  We 
know  that  this  kind  of  experience  and  knowledge  is  not  found,  nor  is  it 
attainable  in  the  chambers  of  philosophers.  Mr.  Mill  had  a  position  in 
the  Home  Office  of  the  East  India  Company,  which,  if  it  afforded  him 
leisure  for  study,  gave  him  little  opportunity  of  becoming  versed  in  the 
affairs  of  the  world  outside  of  the  concerns  of  the  Company,  in  whose 
office  he  held  a  place. 

It  strikes  us  that  J.  S.  Mill,  after  his  very  searching  Essay  on  the 
"  Definitions  of  Political  Economy,  and  on  the  method  of  Investigation 
proper  to  it,"  owed  it  to  the  public  to  furnish  us  a  treatise  on  the  pure 
science  for  which  he  was  more  particularly  qualified,  before  he  undertook 
to  enlighten  the  world  upon  its  applications,  for  which  he  could  not  be  so 
well  prepared.  He  seems  to  have  feared  that  such  a  work  would  be  re 
garded  by  the  British  public  in  no  more  favorable  light  than  that  sug- 

*  The  logical  ability  displayed  in  this  work  is,  we  believe,  universally  con 
ceded.  It  is  accused,  however,  of  belonging  to  Comte's  School  of  Philosophy. 


PRELIMINARY    ESSAY.  lix 

gested  by  McCulloch,  of  an  Address  to  the  pump  in  Aldgate,  and  there 
fore  he  preferred  to  mingle  the  science  and  the  application  together  in 
the  same  volume,  leaving  the  majority  of  his  readers  to  that  hopeless 
confusion  of  ideas  which  has  hitherto  reigned  on  tjiis  ill-fated  topic. 
As  a  reason  for  his  publication,  he  says,  "  that  no  existing  treatise  on 
Political  Economy  contains  the  latest  improvements  which  have  been 
made  on  the  theory  of  the  subject/' — "The  design  of  the  book  is  dif 
ferent  from  that  of  any  treatise  of  Political  Economy  which  has  been 
produced  in  England,  since  the  work  of  Adam  Smith."     The  charac 
teristics  of  the  work  of  Smith  which,  he  wished  to  imitate,  are  "  the  in 
variable  association  of  principles  with  their  applications."  —  "  This,  of 
itself,  implies  a  much  "wider  range  of  ideas  and  topics  than  are  included 
in  Political  Economy,  considered  as  a  branch  of  abstract  speculation. 
For  practical  purposes,  Political  Economy  is  inseparably  intertwined 
with  many  other  ..branches  of  social  philosophy.     Except  in  matters  of 
mere  detail,  there  are,  perhaps,  no  practical  questions,  even  among  those 
which  approach  nearest  to  the  character  of  purely  economical  questions, 
which  admit  of  being  decided  on  economical  premises  alone."     J.  S. 
Mill  thinks  it  is  because  Adam  Smith  never  loses  sight  of  this  truth, 
but  always  blended  his  applications  with  his  theory,  that  he  has  im 
pressed  his  ideas  so  strongly  upon  men  of  the  world  and  legislators. 
We  think  his  success  in  this  respect  is  owing  to  the  direct  manner  in 
which  he  treats  his  various  topics ;  he  does  not  assume  to  be  developing 
a  science,  he  proceeds  neither  by  induction  nor  by  abstraction,  he  merely 
addresses  himself  to   his   readers,   public  and  private,   with  his  best 
thoughts  on  the  subject  before  him,  allowing  his  opinions  and  specula 
tions  to  go  for  what  they  are  worth.     But  since  the  Treatise  of  Say,  we 
are  taught  to  look  for  something  more.     We  have  now  a  science  of 
Political  Economy,  or  we  have  not.     If  we  have  a  science,  we  wish  to 
have  it  distinctly  set  forth  by  capable  men,  and  then  we  desire  to  have 
our  treatises  upon  politics  and  government;  upon  public  and  private 
welfare;  upon  industry  and  commerce;  make  such  use  of  this  science, 
and  draw  from  it  such  light  as  it  affords  for  the  conduct  of  public  affairs, 
and  the  amelioration  of  human  condition.     We  do  not  expect  our  men 
of  science  to  become  all  at  once  our  men  of  business  or  of  art;  but  we 
expect  our  public  men  and  men  of  art  to  overlook  no  progress  made  in 
the  sciences  which  can  furnish  them  aid.     We  think,  therefore,  that  if 
J.  S.  Mill,  instead  of  aiming  at  the  popularity  of  Adam   Smith,  had  % 
bent  his  whole  mind  to  the  elucidation  of  the  science,  he  would  have 
rendered  more  essential  service  to  the  world.     This  was  the  consistent  > 


IX  PRELIMINABY    ESSAY. 

course  of  Senior,  who  now  stands  in  England,  foremost  in  the  pure 
science  of  Political  Economy,  so  far  as  it  is  entitled  to  take  rank  among 
the  pure  sciences. 

J.  S.  Mill  says,  that  "The  Wealth  of  Nations,  is,  in  many  parts, 
obsolete,  and  in  all  imperfect ;"  and  he  is,  therefore,  of  opinion,  that  a 
work  on  that  plan  is  timely  and  desirable.  He  proposed  to  supply  it, 
and  we  think  has  by  this  exposed  himself  to  a  similar  fate  with  that 
to  which  he  consigns  Adam  Smith,  that  of  being  at  no  distant  day  pro 
nounced  obsolete  and  imperfect.  When  we  say  this,  we  are  far  from 
insensible  to  the  merits  of  the  work  before  us.  In  method,  it  sur 
passes  any  previous  work  of  equal  dimensions,  and  it  contains  a  great 
variety  of  clear  and  distinct  reasonings  upon  the  several  divisions  of  his 
subject.  But  its  authority  as  a  work  must  ever  suffer  from  its  double 
character,  and  from  the  fact  which  cannot  be  gainsayed,  that  J.  S.  Mill 
was  not  a  practical  statesman,  however  profound  a  logician  and  phi 
losopher. 

Although  Germany  may  have  been  less  prolific  in  writings  upon  Politi 
cal  Economy  than  France  and  England,  and  less  fruitful  than  its  gene 
ral  literature  would  have  warranted  us  in  expecting,  yet  German  Pro 
fessors  and  public  men  have,  by  no  means,  withheld  their  views  upon 
this  subject  from  the  world.  Their  works  upon  the  various  kindred 
topics  of  Political  Economy,  would  make  a  library  of  themselves.  Ac 
cording  to  the  tendency  of  the  German  mind,  the  most  of  these  are 
Eclectic.  There  are,  however,  some  supporters  of  all  the  leading  schools, 
and  Smith  and  Say  have  their  full  share.  At  the  present  moment, 
List's  School  is  believed  to  be  the  most  influential  and  respectable  in 
every  point  of  view,  although  the  whole  weight  of  English  influence 
is  opposed  to  it,  as  well  as  the  remaining  strength  of  the  School  of 
Smith  and  Say.  The  work  of  List,  herewith  given  to  the  American 
public,  although  imperfect  and  inartificial  in  many  respects,  is  yet  one 
of  the  most  original  and  valuable  which  Germany  has  produced,  and  in 
not  a  few  respects  superior  to  any  previous  work.  The  German  Eclectic 
works  furnish  a  vast  amount  of  well  arranged  information,  and  they  may 
always  be  consulted  with  advantage.  We  would  refer  especially  to  the 
works  of  Schmalz,  Jacob  Vollgraff,  Krauze,  K.  H.  Rau,  Lotz,  Herman, 
and  Schsen ;  but  there  are  others  of  equal  merit  to  some  of  these. 

Political  Economy  has  long  been  a  favorite  subject  in  Italy.  No 
series  of  writings  upon  the  subject  can  justly  be  placed  before  those  of 
the  Italian  peninsula. 

These  were  much  less  known,  until  within  the  present  century,  than 
they  deserved.  They  were  sources  from  which  the  writers  of  other 


PRELIMINARY    ESSAY.  Ixi 

countries  could  draw  without  much  danger  of  detection.  The  subject 
has  been  generally  treated  in  Italy  as  within  the  domain  of  politics.  A 
selection  of  the  Italian  Economists  was,  at  the  instance  of  Napoleon, 
made  and  republished  in  fifty  volumes,  8vo.,  at  Milan,  under  the  direc-  / 
tion  of  Baron  Custodi.  This  publication  was  commenced  in  1803,  and 
completed  in  1816.  It  did  not,  by  any  means,  embrace  all  the  meri 
torious  writers  upon  that  subject  in  the  Italian  language.  Since  that 
publication,  a  great  number  of  important  and  able  works  have  appeared 
in  Italy,  very  few  of  which  belong  to  the  School  of  Smith  and  Say. 
Another  collection  of  Italian  Economists,  and  of  foreign  works  upon 
Political  Economy,  translated,  is  now  in  process  of  publication  at  Turin?  ^ 
which  will  probably  contain  as  much  as  the  collection  of  Custodi.* 

There  is  one  Italian  author  to  whom  we  are  pleased  to  draw  the  atten 
tion  of  the  reader.  MELCHIOR  GIOJA  is  not  only  well  known  as  an  >  / 
Economist  in  Italy,  but  is  distinguished  by  many  works  upon  other 
kindred  topics,  one  of  which  is  the  Philosophy  of  Statistics.  The  work 
now  before  us,  was  published  in  Milan,  in  1815-19,  in  six  quarto 
volumes,  with  the  title ;  "  A  new  Prospectus  of  the  Economical  Sciences, 
containing  a  summary  of  the  ideas,  historical  and  practical,  in  every 
branch  of  administration,  public  and  private."  This  great  work  has 
been  called  an  Encyclopedia  of  Public  Economy,  and  has  been  com. 
pared  to  those  great  lakes  into  which  all  the  streams  and  rivers  of  a 
country  empty  themselves.  Large  as  this  work  is,  it  may  be  consulted 
as  a  model  of  condensation.  Its  synoptical  tables  are  the  wonder  of 
all  who  examine  them.  The  method  throughout  is  so  rigid,  that  tho 
whole  work  would  be  forbidding,  if  the  style  were  not  as  lively  as  the 
method  is  vigorous.  His  analysis  of  writers  upon  Political  Economy  is 
searching,  and  his  criticisms  merciless.  He  spares  none  who  have  ex 
posed  themselves  to  the  lash,  be  they  renowned  or  obscure.  He  ranges 
over  the  whole  subject  from  the  laws  which  refer  to  animals  of  labor,  to 
those  which  regulate  the  affairs  of  the  most  civilized  nations.  One  of 
the  most  remarkable  of  his  Tables  is  that  at  the  close  of  the  fifth  volume, 
in  which  he  arranges  the  contradictions  of  the  principal  Economists  in 

*  This  enterprise  reflects  the  highest  honor  upon  editors  and  publishers,  and 
deserves  the  patronage  of  all  who  are  interested  in  the  progress  of  Political 
Economy.  The  editor  is  Francesco  Ferrara,  Professor  of  Political  Economy  in 
the  University  of  Turin.  The  publishers  are  Cugini,  Pomba  and  Co.,  Turin. 

We  have  the  works  of  Gianni,  2  volumes,  8vo.,  and  the  works  of  Fabbroni, 
2  volumes,  8vo.,  constituting  4  volumes  of  a  collection  of  Tuscan  Economists. 
(Raccolta  degli  Economist!  Toscani.)  How  many  more  are  published  we  know 
not. 


Ixii  PRELIMINARY    ESSAY. 

parallel  columns,  quoting  each  passage,  and  indicating  its  page  with  full 
marginal  notes  of  his  own.  This  Table  occupies  122  pages,  4to.  The 
names  of  Smith  and  Say  figure  conspicuously  in  this  extraordinary  docu 
ment — far  more  space  being  allowed  them  in  this  exposition  than  any 
other  two  writers. 

In  accordance  with  the  general  opinion  of  the  Italian  School,  Gioja 
favored  the  intervention  of  a  government  in  the  affairs  of  its  people,  when 
ever  their  interests  could  be  promoted  by  such  intervention.  At  the  close 
of  the  sixth  volume  he  appends  an  instructive  table,  which  sets  forth  54 
cases  or  occasions,  in  which  a  government  may  beneficially  interpose  to 
assist  the  progress  of  industry,  or  specially  promote  human  welfare,  placing 
in  a  parallel  column  52  instances  in  which  intervention  is  injurious.  The 
manly  courage  of  the  author  is  very  conspicuous  in  this  Table,  in  which 
he  distinctly  specifies  the  injury  inflicted  by  governments  in  encouraging 
that  policy  of  the  Papal  Church  which  has  been  so  fatal  to  the  progress 
and  industry  of  Italy. 

A  few  specimens  from  this  Table  may  be  interesting : — 
"  The  influence  of  government  is  useful : — 1.  In  the  construction  of 
good  roads  and  canals,  which  by  diminishing  the  expense  of  transporta 
tion,  leavqs  to  individuals  a  greater  disposable  capital." 

2.  "  In  the  concession  of  public  aid  by  money  or  credit,  to  enter 
prising  and  capable  men  introducing  new  branches  of  industry,  either 
with  or  without  interest,  or  upon  long  terms  of  payment,  a  policy  which 
may  be  very  beneficial,  as  the  history  of  England  shows." 

3.  "  In  the  exempting  from  taxes  for  a  certain  number  of  years,  lands 
recently  reclaimed  or  newly  brought  into  cultivation." 

4.  "  In  the  construction  of  public  works,  the  income  of  which  may 
not  only  facilitate  the  progress  of  industry,  but  assist  in  keeping  taxation 
at  the  lowest  possible  point." 

5.  "  In  the  location  and  number  of  tribunals  of  justice,  so  as  to  save 
the  time  of  suitors  and  witnesses." 

6.  "  In  the  establishment  of  libraries  containing  rare  and  expensive 
works  of  science  and  taste ;  museums  of  natural  history,  formed  of  the 
productions  of  every  portion  of  a  country ;  cabinets  of  machinery,  an 
cient  and  modern,  with  privileges  to  workmen  and  artists  to  examine 
them  daily ;  and  similar  liberty  to  students  in  the  libraries." 

7.  "  In  the  establishment  of  botanic  gardens  for  the  purpose  of  accli 
mating  exotic  plants,  and  testing  their  value ;  in  observations  to  ascertain 
the  influence  of  the  seasons  upon  agriculture ;  in  Medical  Institutions  so 
situated,  and  in  such  mutual  correspondence,  that  they  can  observe  and 
record  the  general  movement  of  mortality  and  disease." 


PRELIMINARYESSAT.  Ixiii 

8.  "In  free  schools  for  the  ordinary  branches  of  common  education, 
and  for  instruction  in  agriculture,  and  in  the  common  arts  and  trades/' 

9.  "In  academical  institutions  for  the  promotion  of  every  kind  of 
knowledge,  for  the  removal  of  prejudices,  and  for  stimulating  emula 
tion." 

10.  "  In  the  free  publication  of  books,  only  so  controlled  as  that  the 
reputation  of  the  people,  good  morals  and  the  public  peace,  may  have 
nothing  to  fear." 

11.  "In  the  liberty  of  the  press,  to  the  credit  of  which  Independence 
is  necessary." 

12.  "  In  sending  men  of  skill  and  science  to  every  part  of  the  world 
where  information  useful  to  commerce  and  industry  may  be  obtained, 
that  all  the  discoveries,  inventions  and  useful  processes,  may  be  imme 
diately  introduced  at  home." 

These  twelve  propositions  stand  first  in  the  Table  under  the  heads  of 
Power  and  Knowledge.  There  are  twelve  more  heads,  under  which  are 
42  propositions.  Among  which  it  may  be  noted  is  one  proposing  a 
repeal  of  all  restrictions  upon  rates  of  interest ;  one  to  allow  the  pre 
cious  metals  to  fluctuate  according  to  their  market  value,  without  fixing 
that  value  by  a  law  of  legal  tender ;  one  providing  for  restrictions  in  the 
commerce  of  gold  and  silver,  and  of  drugs  and  medicines;  one  for  se 
curing  patent-rights  and  also  copy-rights ;  one  for  uniform  weights  and 
measures ;  one  regulating  the  post-office ;  one  for  a  special  mining  code ; 
one  upon  the  subject  of  the  locality  of  factories,  the  operation  of  which 
may  be  prejudicial  to  the  health  or  comfort  of  those  residing  in  the 
vicinity ;  one  limiting  the  quantity  of  ground  which  may  be  held  for 
the  mere  purposes  of  game  m}  and  the  surface  of  water  which  may  be 
appropriated  as  a  fishery."* 

*  We  add  some  specifications  in  which  governments  intervene  to  the  injury  of 
their  people. 

1.  "In  the  imposition  of  taxes  so  heavy  as  to  diminish  disposable  capital, 
hinder  improvement  and  check  production." 

2.  "In  the  bestowal  of  public  funds  upon  monastic   corporations,  which 
keep  men's  tongues  employed  instead  of  their  hands ;  in  which  men  live  in  happy 
idleness,  and  aspire  to  wealth  after  having  made  a  vow  of  poverty ;  insensible 
on  the  one  hand  to  all  improvements,  and  on  the  other,  persuaded  that  they  can 
acquit  themselves  of  what  they  owe  to  this  world,  by  bills  of  exchange  upon 
the  world  to  come." 

3.  "  In  the  exemption  from  taxation  of  the  property  of  the  nobility  and 
clergy,  casting  that  much  greater  burden  upon  the  other  classes,  and  rendering 
the  nobles  and  priests,  as  a  class,  without  stimulus  to  production." 


Ixiv  PRELIMINARY    ESSAY. 

The  vast  work  of  Gioja  is  wholly  unlike  any  of  the  great  works  upon 
Political  Economy  in  French,  English,  or  German.  It  discusses  the 
same  topics,  but  always  with  a  practical  view,  and  the  only  pretensions 
to  science  is  a  scientific  arrangement  of  the  subject.  He  speaks  at  all 
times  of  an  art,  the  art  of  administering  a  government,  and  in  his 
hands  the  subject  in  no  place  assumes  the  form  of  an  abstract  or  experi 
mental  science.  His  leaning  is  undoubtedly  to  the  system  of  industry 
in  England  at  the  period  of  his  writing,  from  1814  to  1819.* 

4.  "  In  imposing  burdens  of  public  services  upon  individuals  and  classes, 
without  regularity  or  justice  in  the  apportionment." 

5.  "  In  compensating  judges  and  officers  by  fees  levied  upon  the  parties  liti 
gant,  whereby  it  is  made  the  interest  of  officers  to  favor  litigation,  and  promote 
disputes  in  place  of  allaying  them,  and  whereby  one  or  both  parties  are  often 
wholly  ruined.'' 

6.  "  In  allowing  the  existence  of  the  Inquisition,  which  promotes  genuflection 
instead  of  preaching,  which  lets  him  alone  who  robs,  and  persecutes  him  who 
thinks :  which  is  equally  the  foe  of  kings  and  people,  and  inflicts  punishments 
severe  in  proportion  to  the  refinement  and  moral  worth  of  its  victims." 

7.  "In  permitting  false  miracles  and  superstitious  impostures  to  be  used  in 
leading  people  astray,  &c." 

8.  "In  permitting  occult  arts,  magic  and  astrology,  to  be  practised  to  the  in 
jury  of  the  weak  and  unwary." 

9.  In  allowing  Monastical  Institutions  to  be  charged  with  the  business  of  edu 
cation,  whilst  they  are  strangers  to  the  wants  and  ideas  of  the  mass  of  the  popu 
lation,  to  the  affections  and  habits  which  govern  them ;  that  is,  committing  those 
who  have  eyes,  to  be  educated  by  those  who  are  blind." 

10.  "  Relates  to  the  Index  Ezpurgatorius." 

11.  "Taxing  all  sorts  of  printing,  rendering  books,  &c.,  dear,  and  dimmish, 
ing  the  number  of  readers." 

12.  "  In  permitting  various  orders  of  monks  to  traverse  the  country,  vending 
superstition  and  ghostly  terror,  receiving  corn  and  wine  in  exchange,  a  contract 
in  which  there  is  great  loss,  because  one  part  gives  a  real  value,  the  other,  only 
a  shadow." 

*  Gioja  is  called  the  Colossus  of  Political  Economy  in  Italy,  and  it  is  believed 
his  work  has  had  a  great  share  in  the  reforms  which  now  distinguish  the  public 
administration  of  Sardinia,  a  country  in  which  more  freedom,  more  firmness, 
and  greater  intelligence  has  been  exhibited  by  the  government  in  the  last  few 
years,  than  in  any  other  existing  nation.  Let  the  King  of  Sardinia  be  awarded 
a  place  among  kings  according  to  his  real  merit,  and  who  could  stand  before 
him  ?  There  are  some  who  might  surpass  him ;  we  trust  they  may.  At  present 
he  stands  first  as  a  good  king,  —  the  real  father  of  his  people. 

A  bibliographical  notice  in  Blanqui's  History  of  Political  Economy,  says 
of  Gioja's  great  work:  —  "It  would  appear  long,  if  the  author,  who  was 
a  man  of  fine  mind,  had  not  made  it  a  real  encyclopedia  of  Political  Eco- 


PRELIMINARY    ESSAY.  Ixv 

It  has  not  been  our  intention  to  notice  specially  American  writers 
upon  Political  Economy.  For  the  most  part,  they  have  assumed  that 
the  science  was  settled,  and  to  be  found  in  the  works  of  Adam  Smith, 
J.  B.  Say,  and  a  few  other  writers ;  these  productions  are  chiefly  pre 
pared  by  Professors,  and  intended  for  the  use  of  Colleges.  The  object 
of  the  writers  was  not  so  much  original  research,  as  the  making  the  best 
use  they  could  of  the  materials  on  hand.  To  examine  and  appreciate 
those  American  Political  Economists  who  have  left  the  beaten  path, 
would  require  both  time  and  space,  which,  as  the  task  does  not  come 
within  our  plan,  we  cannot  now  spare.  Without  prejudice  to  others, 
we  may  refer  specially  to  Carey,  Raymond,  Rae,  Colton,  and  E.  Peshine 
Smith. f  Of  these,  one  has  made  himself  so  widely  known,  both  in 
Europe  and  America,  that  we  cannot,  even  in  this  brief  reference  to  our 
Economists,  omit  a  special  notice.  HENRY  C.  CAREY  inherited  from 
his  father,  Mathew  Carey,  a  tendency  to  Economical  studies.  The  son, 
however,  departed,  in  his  early  career,  from  his  father's  views,  and  pub 
lished  several  works  decidedly  in  the  traces  of  the  Say  School.  Severe 
thinking,  however,  and  close  observation  of  the  progress  and  condition 
of  nations,  carried  him  clear  of  the  fallacies  of  the  science  of  wealth. 
Mr.  Carey  became  an  original  writer  of  such  power,  that  his  merit  was 
soon  acknowledged,  even  by  those  who  disputed  his  doctrines.  To 
show  how  completely  he  was  emancipated  from  the  narrow  views  of 
those  who  confine  the  subject  to  wealth,  we  need  only  point  to  the  table 
of  contents  of  his  "Past,  Present  and  Future,"  where  we  find  that  two 
chapters  of  fifteen  are  on  the  subject  of  wealth.  We  see  there, — 
"Man  and  Land;"  "Man  and  Food;"  "Man  and  his  Standard  of 
Value;"  "Man  and  his  Fellow-man;"  "Man;"  "Man  and  his  Help 
mate;"  "Man  and  his  Family."  It  would  be  difficult  to  present  a 
stronger  contrast  than  is  offered  by  this  mode  of  considering  the  subject 
of  Political  Economy,  and  that  pursued  by  J.  B.  Say.  Mr.  Carey's 
more  recent  works  have  been  translated  into  several  languages,  and  are 

nomy,  rich  in  documents  the  most  precious,  and  in  citations  the  most  curious. 
His  criticism  is  severe,  and  respects  not  even  the  highest.  Adam  Smith  and  J. 
B.  Say  have  in  turn  received  the  fire  of  his  epigrams.  He  is  the  Geoffroy  of 
Political  Economy ;  his  darts  are  chiefly  pointed  at  those  who  are  not  of  his  own 
country,  and  yet  his  great  erudition  gives  his'  criticisms  every  appearance  of 
justice.  His  work  is  too  little  known  and  studied  in  France." 

f  We  do  not  regard  Francis  Lieber  as  a  writer  upon  Political  Economy.  His 
distinguished  writings  occupy  another  field.  We  imagine  that  he  is  too  little 
satisfied  with  their  doctrines  to  belong  to  any  of  its  Schools. 


PRELIMINARY    ESSAY. 

employed  as  text-books  in  several  of  the  European  Universities.  He 
has,  in  fact,  placed  himself  at  the  head  of  a  School  of  Political  Eco 
nomy  highly  respectable  for  intelligence  and  numbers.  His  writings 
upon  the  subject  of  Banks,  Credit,  and  Money,  have  been  especially 
appreciated.  Differing  widely  upon  many  points  from  Mr.  Carey,  we 
yet  feel  bound  to  say,  that  among  those  who  are  now  engaged  in  the 
work  of  perfecting  this  science,  he  must  be  placed  in  the  first  rank.  To 
the  future  belongs  the  task  of  awarding  the  prize  of  complete  success 
to  him  who  shall  surmount  difficulties  which  have  hitherto  baffled  the 
efforts  of  men  of  as  great  and  varied  powers  of  mind  as  have  ever  been 
brought  to  bear  upon  any  subject. 

Carey  and  McCulloch,  both  with  great  knowledge  of  details,  unite  in 
regarding  the  subject  from  a  practical  point  of  view;  but,  while  McCul 
loch  gives  himself  little  concern  about  the  formula  or  strictness  of  sci 
ence,  Carey  persists  in  the  belief  that  Political  Economy  is  susceptible 
of  being  reduced  to  the  form  of  a  pure  science.  In  this  respect  Carey 
partakes  of  the  faith  of  Kossi  and  Senior,  without,  however,  using  the 
same  elements.  His  science,  when  completed,  from  present  indications, 
will  not  correspond  in  form  or  statement  with  the  system  of  either.  We 
cannot  doubt  that  if  a  pure  science  shall  ever  be  developed  and  univer 
sally  received,  Carey  will  be  found  to  have  contributed  his  full  share  to 
the  work. 

It  is  a  fact  of  special  notoriety  in  the  history  of  Political  Economy, 
that  whilst  its  great  authorities  differed  both  upon  the  elements  and  the 
nature  of  the  science,  upon  its  laws  and  upon  its  applications,  and  whilst 
taken  as  a  whole,  no  subject  could  be  more  unsettled,  and  no  instruction 
more  unsatisfactory,  it  was  thrust  upon  the  attention  of  legislators  and 
statesmen,  with  a  zeal  and  perseverance  which  only  the  clearest  demon 
strations  could  have  warranted.  Whether  the  disciples  of  Say,  who 
were  most  conspicuous  in  this  pressure  upon  public  men,  were  merely 
inspired  by  confidence  in  their  doctrines,  or  were  actuated  by  the  desire 
of  promoting  the  science  by  a  course  of  national  experiments,  may  never 
be  known.  As  Say  had  proclaimed  the  science  to  be  one  of  experiment, 
it  is  most  probable  that  the  experimental  career  was  the  dictate  of  that 
School.  Yet  how  little  was  there  to  justify  the  supercilious  tone  which 
has  been  adopted  towards  those  who  are  inclined  to  doubt  both  the 
soundness  of  their  doctrine,  and  the  wisdom  of  its  teachers.  These  pre 
tensions  have  had  more  sway  than  was  due  to  them.  There  has  been 
an  increasing  effort  of  these  theorists  to  influence  governments,  and  con 
trol  society,  for  the  last  half  century.  France,  Germany,  and  the 


PKELIMINAKY    ESSAY. 

United  States,  have  been  the  chief  theatre  of  their  efforts.  Russia 
broke  away  from  them  in  1821,  and  applied  her  whole  attention  to 
building  up  her  infant  industry  and  civilization,  and  with  a  success 
which  all  the  world  has  seen  and  acknowledged.  It  is  true,  neither 
France  nor  Germany,  nor  the  United  States,  have  given  their  entire 
sanction  to  this  divorce  of  wealth  from  politics,  morals  and  religion, 
because  men  in  power  and  with  the  responsibilities  of  government  upon 
their  shoulders,  however  strongly  urged  in  this  false  direction,  could  see 
mischiefs  in  the  path ;  and  however  misled  by  theory,  could  not  but 
hesitate  to  adopt  a  policy  of  which  the  first  step  portended  ruin  to  mul 
titudes.  In  this  state  of  mind,  the  governments  of  these  countries  have 
merely  inflicted  upon  their  several  populations,  the  very  great  evil  of  an 
uncertain  and  fluctuating  industrial  policy.  They  have  appeared  to 
t  falter  undecided  between  the  authoritative  demands  of  the  so-called 
science  of  Political  Economy,  and  what  appeared  to  be  the  plain  dictates 
of  common  sense,  in  regard  to  the  interests  of  the  people.  The  mis 
chiefs  of  this  halting  between  two  opinions  it  is  impossible  to  weigh,  but 
they  have  been  an  obstacle  to  the  progress  of  human  welfare,  fearful  to 
contemplate. 

Unhappily  for  the  cause  of  truth  and  sound  statesmanship,  Malthus* 
theory  of  population  intervened  in  the  same  half  century  as  a  prop  to 
the  theorists  in  Political  Economy.  As  the  latter  desired  to  build  up  a 
system  of  wealth,  industry  and  trade,  distinct  from  political,  moral  and 
religious  considerations,  that  is  apart  from  the  highest  humafc  interests, 
this  theory  of  population  appeared  to  justify  the  attempt,  by  proving 
that  men  were  coming  into  the  world  too  fast  for  its  capacity  to  feed 
them,  and  propounding  as  a  remedy  for  this  undue  obedience  to  the 
command,  to  "  multiply  and  replenish  the  earth/'  starvation  for  those 
who  had  already  "  come  unbidden  to  the  banquet  of  life ;"  and  some 
sufficient  check  to  such  multiplication  of  human  beings  hereafter.  The 
effect  of  these  two  theories  in  a  vast  number  of  minds,  was  to  accom 
plish  an  entire  severance  between  the  industrial  interests  of  men  and 
Christianity.  In  other  words,  neither  kindness  nor  charity,  nor  high 
moral  interests,  nor  religion,  had  any  voice  in  the  view  of  such  men  in 
adjusting  the  industrial  position  of  that  immense  class  of  men  who  not 
only  work  for  their  own  living,  but  actually  produce  the  articles  by  which 
other  men  live.  Whatever  of  truth  may  have  been  mingled  in  their 
views,  there  could  be  no  safety  in  their  conclusions.  Their  starting  point 
of  wealth  could  not,  by  any  possibility,  be  a  logical,  any  more  than  a 
humane  guide  to  sound  conclusions. 


r 

Ixviii  PRELIMINARY    ESSAY. 

The  absurdity  of  divorcing  wealth  from  its  indispensable  union  with 
human  interests,  and  from  its  dependence  upon  considerations  and 
motives  higher  than  wealth,  is,  in  no  aspect,  more  striking  than  in  the 
attempt  to  separate  it  from  national  policy  and  politics.  Whether  this 
serious  mistake  arose  from  the  exigencies  of  logic,  or  from  neglecting 
the  distinction  between  science  and  art,  it  was  equally  fatal  to  clear  per 
ceptions.  The  assumption  that  the  whole  range  of  interests  and  subjects 
usually  embraced  in  Political  Economy,  that  is,  all  that  relates  to  in 
dustry,  to  trade  and  social  amelioration,  should  be  withdrawn  from  the 
domain  of  politics,  and  from  the  discretion  of  statesmen  and  legislators, 
and  be  committed  to  Political  Economists,  was  so  bold,  if  not  so  pre 
sumptuous,  that  it  could  never  have  been  made,  except  by  men  laboring 
tinder  some  great  delusion.  And  when  we  reflect  upon  the  extremely 
unsettled  state  of  the  science,  by  the  light  of  which,  Political  Econo. 
mists  in  their  closets  were  to  decide  upon  the  well-being  of  millions 
upon  millions  of  people,  and  upon  the  fate  of  nations,  we  cannot  but 
wonder  that  such  an  idea  was  ever  entertained  for  a  moment  by  men  of 
intelligence.  Yet  this  doctrine  has  had  its  day,  and  even  now  prevails 
to  some  extent.  There  is  a  certain  order  of  minds,  which,  abhorring 
details,  and  feeling  unable  to  grapple  with  them,  gladly  takes  refuge  in 
rules  and  generalities ;  and  to  this  must  belong  those  who  imagine  that 
the  science  of  Political  Economy  is  entitled  to  take  precedence  of  politi 
cal  wisdom  and  experience. 

Nations  Are  associations  designed  to  obtain  and  realize  all  the  advan 
tages  which  united  power  and  wisdom  can  secure  for  a  people.  How 
ever  this  object  may  be  modified  or  limited  by  forms  of  government, 
or  ancient  customs  and  legislation,  the  same  great  motive  remains.  The 
legislation  of  civilized  countries,  the  skill,  knowledge  and  experience  of 
statesmen,  are,  or  should  be,  chiefly  directed  to  this  point.  No  govern 
ment  is  so  restricted  in  its  powers,  as  to  be  a  mere  negation  in  regard  to 
the  social  interests  of  the  country,  and  none  should  be  so  blind  as  not 
to  see  that  it  must  be  vain  to  attempt  securing  any  higher  interests  of  a 
people,  while  their  material  or  industrial  interests  are  neglected  or  suf 
fered  to  languish.  The  extent  to  which  governments  have  already  gone, 
and  must  necessarily  go,  in  protecting  and  promoting  industry,  clearly  con 
tradicts  the  idea,  that  men  can  be  let  alone  to  manage  their  private  busi 
ness  entirely  in  their  own  way.  Such  is  the  legislation  in  regard  to  cor 
porations,  partnerships,  banks,  brokers,  railways,  canals,  roads,  mechanics' 
liens,  apprenticeships,  inspections,  patent-rights,  copy-rights,  hours  of 
labor,  licences,  auctions,  conveyances  of  real  estate,  coinage,  weights  and 


PRELIMINARY    ESSAY.  Ixix 

measures,  promissory  notes,  and  insolvency;  all  such  enactments,  of 
which  there  is  a  vast  mass,  are  designed  to  regulate  the  course  of  busi 
ness,  and  control  men  in  their  private  affairs.  The  extent  to  which  this 
intervention  may  be  advantageously  carried,  is  not,  and  cannot  be  deter 
mined  in  advance,  but  must  be  left  with  the  institutions  of  a  country,  to 
the  sound  discretion  of  those  in  whom  its  power  is  vested. 

Every  nation  must  have  a  system,  mainly,  its  own.  It  is  literally  im 
possible,  that  a  population  occupying  an  extensive  territory,  can  be  de 
pendent  upon  other  countries  for  any  considerable  portion  of  its  con 
sumption,  without  great  sacrifice.  However  one  country  may  be 
disposed  to  look  to  others  for  its  supplies,  it  can  only  obtain  them  to  the 
extent  that  other  countries  need  its  products.  Its  consumption  will  then 
be,  not  in  proportion  to  the  power  of  domestic  production  and  the  peoples' 
wants,  but  to  the  desire  of  other  conntries  to  have  their  commodities. 
In  point  of  fact,  it  is  found  that  every  nation  mainly  supplies  its  own 
wants.  This  country  is  the  most  profuse  consumer  of  goods  manufac 
tured  and  grown  in  other  countries,  of  any  in  the  world.  We  import 
nearly  ten  per  cent,  of  our  consumption ;  the  imports  of  Great  Britain 
are  equal  to  ten  per  cent,  of  her  consumption,  but  a  very  large  proportion 
of  these  imports  consists  of  cotton,  wool,  silk,  and  other  raw  materials 
of  those  manufactures,  which  form  the  bulk  of  the  exports;  the  imports 
of  Belgium,  including  raw  material,  are  also  ten  per  cent. ;  those  of 
France,  raw  materials  included,  scarcely  exceed  five  per  cent. ;  but 
Russia,  Austria,  Germany  and  Italy,  do  not  import  one  per  cent,  of  their 
consumption.  In  looking  then  at  the  system  of  domestic  industry,  by 
which  the  wants  of  a  people  are  mainly  supplied,  the  portion  brought 
from  other  countries  may  be  left  out  of  view,  whilst  the  attention  is 
specially  fixed  upon  the  mode  in  which  from  ninety  to  ninety-nine  per 
cent,  of  the  commodities  consumed  are  produced.  The  foreign  trade,  its 
object,  scope  and  interest,  can  be  better  understood  after  what  concerns 
the  home  industry  is  fully  apprehended.  And  it  cannot  be  doubted,  that 
the  industry  on  which  a  people  are  dependent  for  ninety  to  ninety-nine 
per  cent,  of  their  consumption,  must  be  a  more  important  interest  than 
that  which  furnishes  only  from  one  to  ten  per  cent. 

Four-fifths  of  every  population  are  engaged  in  the  actual  work  of 
production.  Food,  raiment,  habitations,  and  the  furniture  within  them, 
are  the  chief  objects  of  their  labor.  The  other  fifth  is  made  up  of 
classes  not  actually  engaged  in  this  work  of  production,  but  necessary 
for  the  proper  constitution  of  civilized  society ;  this  class  furnishes  the 
officers  of  government,  men  of  the  professions,  of  science,  and  of  every 


1XX  PRELIMINARY    ESSAY. 

intellectual  calling,  all  who  minister  to  mental  gratifications,  merchants 
of  every  grade,  and  those  engaged  in  the  business  of  transportation  by 
land  or  sea;  to  these,  we  must  add  the  men  of  capital,  who  live  upon 
invested  wealth,  contributing  in  no  way  actively  to  the  general  welfare ; 
and  the  paupers  and  criminals,  who  are  a  dead  weight  upon  society. 

It  is  apparent,  at  the  first  glance,  that  there  is  a  state  of  mutual  de 
pendence  among  the  millions  thus  classified.  Every  individual  receives 
for  his  own  consumption  some  of  the  labors  of  all  the  others.  The  ag 
riculturists,  manufacturers,  and  mechanics,  are  the  sole  producers,  but 
they  cannot  carry  on  their  work  without  the  aid  of  -the  others.  These 
producers  are  also  dependent  upon  each  other.  This  whole  scene  of 
industry,  production,  and  mutual  dependence,  resolves  itself  in  its 
largest  aspects,  as  well  as  in  its  minutest  details,  into  an  exchange  of 
labor.  Knowledge,  experience,  and  civilization,  have  brought  about 
such  a  division  of  labor,  that  scarcely  a  man  produces  any  special  com 
modity.  Men  contribute  their  labor,  and  skilful  combinations  convert 
the  results  of  this  divided  labor  into  the  'commodities  which  men  need. 
To  avoid  complication,  we  may  overlook  money  and  other  devices  by 
which  men  exchange  their  individual  labor  for  the  products  of  the  labor 
of  hundreds  of  others.  The  system  of  domestic  industry  and  internal 
trade  is  that  by  which  men  produce  and  exchange  commodities  and 
services  with  each  other  to  the  extent  of  from  ninety  to  ninety-nine  per 
cent,  of  their  consumption.  They  accomplish  this  by  a  price  fixed  upon 
every  commodity  and  every  service,  which  price  is  expressed  in  money 
of  account.  It  is  obvious  that  the  peculiar  circumstances  of  every 
country  must  combine  to  fix  an  average  price  of  labor  in  each  country, 
through  all  the  various  ramifications  of  employment  and  industry. 
It  is,  in  fact,  known  that  every  country  has  a  different  price  of  labor, 
and  every  different  scale  may  be  found,  from  one  dollar  per  day  in  the 
United  States,  to  five  cents  per  day  in  India.  The  rates  of  labor  in 
any  country  must  mainly  regulate  the  price  of  all  its  commodities  and 
all  the  services  which  men  render  to  each  other,  and  also  the  expenditure 
of  government.  If  this  great  internal  exchange  is  favored  by  public 
authority,  and  facilitated  by  the  removal  of  all  obstacles  and  friction,  it 
may  move  with  that  regularity  which  is  indispensable  to  the  general 
well-being;  the  comfort,  and  welfare,  nay,  the  lives  of  multitudes,  are 
dependent  upon  it.  The  special  scale  of  prices  following  upon  the 
price  of  labor,  is  one  which  tends  towards  justice  for  all,  for  all  have  a 
voice  in  fixing  the  price  of  their  own  labor  or  services.  If  undisturbed, 
this  scale  of  prices  will  bring  a  fair  remuneration  to  all ;  the  agricultu- 


PRELIMINARY    ESSAY. 

lists,  manufacturers,  and  mechanics,  will  estimate  their  respective  com 
modities,  or  the  labor  which  produced  them,  by  the  same  money  of 
account,  and  at  the  same  average  price  of  labor ;  their  exchanges  then, 
as  among  themselves,  will  be  just.  In  proportion  to  the  price  of  the 
articles  of  consumption  will  be  the  taxes  of  government,  the  profits  of 
merchants,  and  the  charges  of  professional  men  and  others  for  their 
services.  Sp  far  as  such  a  complicated  adjustment  can  be  so,  it  tends 
to  become  fair  and  complete.  The  prices  may  be  high  or  low  compared 
with  those  of  other  countries,  but  as  among  the  parties  chiefly  interested, 
they  are  neither  high  nor  low,  but  right,  and  cannot  be  suddenly 
changed  without  immense  confusion  and  injustice. 

The  most  important  consideration  then  in  reference  to  this  scene  of 
domestic  labor  and  production,  is  not  the  nominal  prices  or  rates  at 
which  their  mutual  exchanges  are  made,  but  the  efficiency  and  skill  of 
the  labor,  the  obtaining  the  largest  quantity  of  commodities,  and  of  the 
best  quality.  But  even  this  result  is  subordinate  to  the  consideration 
of  the  distribution.  The  great  aim  then,  is  a  large  quantity  of  commo 
dities  of  the  best  quality,  produced  under  such  conditions  that  the  labor 
ers  or  producers  receive  their  full  share  of  these  commodities  as  a  com 
pensation  for  their  labor.  There  need  be  no  limit  to  that  consumption 
which  depends  upon  mutual  industry,  but  the  productive  power  of  the 
labor.  It  is  the  interest  of  governments,  of  capitalists,  of  employers, 
and  of  all  the  useful,  though  not  directly  producing  classes  of  society, 
that  the  work  of  production  should  be  carried  to  such  a  point  of  success, 
as  will  ensure  a  high  degree  of  comfort  to  the  producing  classes.  Active 
industry  sharpens  the  intellects,  and  quickens  the  energies  of  the  pro 
ducers,  that  is,  of  four-fifths  of  the  whole  population,  and  thus  carries 
vigor  and  intelligence  into  every  branch  of  production.  The  degree  of 
skill  and  knowledge  necessary  to  produce  any  article,  is  a  productive 
power,  which  may  be  increased  indefinitely  by  keeping  it  in  action,  and 
by  improving  the  physical  and  mental  energies  of  those  who  wield  that 
power.  The  whole  industry  of  a  nation  constitutes  a  system  of  these 
productive  powers  in  a  state  of  mutual  dependence ;  for  they  feed  upon 
each  other;  each  prospers  as  the  others  prosper,  and  all  suffer  when  one 
languishes.  The  individuals  of  every  class,  or  which  make  up  any  par 
ticular  productive  power,  are  consumers  more  or  less  of  the  products  of 
every  other  class.  The  efficiency  of  their  power  depends  greatly  on 
their  vicinity  to  each  other,  and  the  facility  with  which  they  communi 
cate.  Agriculture  flourishes  in  proportion  to  the  vicinity  of  its  con 
sumers  ;  a  district  which  can  feed  a  million  of  men,  diffused  over  its  own 


Ixxii  PRELIMINARY    ESSAY. 

surface,  besides  its  agriculturists,  could  not  sustain  250,000  men  at 
the  distance  of  100  miles.  That  agriculture,  which  is  provided  with  a 
market  close  at  hand  for  its  entire  product,  the  heavy  and  perishable,  as 
well  as  that  which  would  bear  transportation,  is  many  times  more  pro 
ductive  than  that  which  has  only  a  distant  market.  Land  in  the  vicin 
ity  of  large  cities,  or  upon  which  there  is  a  numerous  population  of 
manufacturers,  is  five  or  six  times  more  valuable  than  that  where  the 
population  is  sparse,  and  agriculture  confined  to  the  cereal  or  light 
crops.  But  whether  the  population  of  a  country  is  heavy  or  sparse,  its 
industry,  if  active  and  profitable,  is  a  system  bound  together  by  common 
interests,  and  its  prosperity  and  progress  depend  upon  the  strength  and 
efficiency  of  that  system  as  a  whole.  A  prosperous  agriculture  induces 
a  large  consumption  of  clothing  and  furniture,  and  a  large  demand  for 
buildings  and  for  agricultural  implements;  activity  in  manufacturing 
and  in  the  mechanical  arts,  enables  those  engaged  to  consume  freely  the 
products  of  agriculture;  the  activity  of  the  whole  of  the  producing 
classes  is  reflected  upon  every  other  class  and  interest,  with  like  benefit 
to  all.  Now  this  whole  system  of  home  industry,  existing  under  the 
same  laws,  under  control  of  the  same  government,  and  under  the  watch 
ful  eye  of  every  true  friend  of  the  country,  can  be  promoted  and  aided 
as  a  whole,  only  by  a  public  policy  which  extends  to  the  whole,  or 
by  measures  strengthening  and  promoting  particular  branches  of  indus 
try,  important  to  the  system  as  a  whole.  In  such  a  system,  if  the  rates 
of  labor  are  high,  the  prices  paid  for  commodities  may  appear  high  com 
pared  with  those  paid  for  corresponding  articles  in  other  countries ;  but 
the  criterion  of  the  benefits  enjoyed  by  the  inhabitants  of  two  countries, 
is  not  the  price  of  the  articles  they  consume,  but  the  quantity  of  articles 
they  consume;  the  price  of  labor  and  the  price  of  goods,  must  be 
taken  together.  That  system  of  industry  is  the  best  which  affords  the 
largest  consumption  to  the  masses,  and  the  best  opportunities  of  moral, 
mental  and  physical  improvement.  Such  a  system  can  only  be  secured 
by  wise  legislation,  by  a  true  regard  for  the  rights  of  humanity,  and  a 
true  conception  of  the  utility  and  necessity  of  employing  national  power 
and  unity  for  this  greatest  national  object. 

It  is  not,  however,  enough  that  the  producing  classes  should  be  indus 
trious  :  it  is  indispensable  that  there  should  exist  a  distributing  or  com 
mercial  agency.  This  is  a  task  so  complex,  involving  so  much  labor, 
skill  and  intelligence,  that  it  gives  employment  in  various  ways  to  the 
tenth  of  a  population.  The  commodities  which  are  the  product  of  home 
industry,  and  designed  for  consumption,  are  purchased  by  merchants, 


PRELIMINARY    ESSAT.  Ixxiii 

assorted,  carried  to  their  various  destinations,  or  distributed  over  the 
whole  country,  as  the  demand  for  them  indicates.  This  necessary 
agency  is  a  heavy  expense,  and  a  severe  tax  upon  producing  industry, 
but  it  is  unavoidable,  because  the  goods  cannot  be  consumed  unless  they 
are  distributed.  It  is  cheaper  for  consumers  to  pay  others  for  distribution, 
than  to  attempt  it  themselves.  It  is,  nevertheless,  an  agency,  and  how 
ever  needful,  it  should  do  its  work  at  the  least  expense  to  those  for  whom 
it  acts,  which  is  practicable,  consistent  with  ample  compensation  to  those 
who  are  engaged  in  it.  It  differs  from  producing  industry  in  this  im 
portant  respect,  that  while  the  one  may  and  should  be  developed  to  the 
highest  point,  the  other  should  not  be  developed  nor  increased  beyond 
the  point  of  performing  adequately  a  limited  task.  It  is  desirable  to 
keep  the  agency  effective,  but  it  should  not  in  expense  or  numbers 
engaged,  transcend  the  limits  of  economy  or  necessity.  There  are 
strong  tendencies  connected  with  the  business  which  beget  many  abuses 
and  much  hardship ;  facts  which  are  not  to  be  overlooked  nor  underrated 
in  every  consideration  of  the  commercial  agencies. 

It  being  the  interest  of  the  merchant  to  purchase  at  the  lowest  rate 
he  can,  whatever  may  have  been  the  labor  bestowed  upon  a  commodity, 
and  whether  the  producers  are  remunerated  or  not,  and  to  sell  his  com 
modities  at  the  highest  rate  he  can  obtain,  whether  the  consumers  can 
afford  to  pay  or  not;  so  far  as  this  temptation  influences  the  action  of 
merchants,  it  deranges  the  regular  exchanges  of  society,  and  is  highly 
mischievous.  It  weakens  productive  power  by  taking  from  the  pro 
ducing  classes,  not  merely  some  portion  of  that  wealth  which  belongs  to 
them,  but  often  withholds  from  them  the  comforts,  and  even  the  neces 
saries  of  life.  And  a  further  evil  is,  that  the  greater  the  accumulation  I 1 
of  wealth  in  the  hands  of  merchants,  the  more  able  are  they  to  avail  • « 
themselves  of  their  position,  to  exact  great  profits  or  impose  heavy  bur 
dens  upon  industry.  Rich  merchants  do  not  indicate  a  rich  population, 
for  the  annual  gains  of  merchants  are  taken  from  the  annual  labor  of 
the  people.  They  can  refuse  to  purchase  from  those  who  are  under  the 
necessity  of  selling,  until  they  make  their  own  terms  of  purchase ;  they 
can  retain  goods  which  are  in  great  demand,  until  they  make  their  own 
terms  of  sale.  Where  there  are  such  temptations,  many  will  yield  to 
them.  The  whole  subject  is  worthy  of  attention,  and  should,  at  the 
least,  be  the  object  of  a  right  public  sentiment. 

But  industry  encounters,  in  the  progress  of  this  exchange  of  com 
modities,  and  in  the  operations  of  the  commercial  agency  by  which  it  is 
effected,  other  checks  and  obstacles  still  more  important.     And  whilst 
4 


PRELIMINARY    ESSAY. 

it  is  true  that,  production  owes  no  little  of  its  success  to  the  aid  of  mer 
chants  and  the  great  capital  which  they  accumulate,  it  is  very  evident 
that  commercial  fluctuations,  speculations,  and  revulsions,  inflict  more 
serious  injuries  upon  labor  than  all  other  causes  together.     Fluctuations 
in  price  may,  and  sometimes  do,  proceed  from  other  causes,  but  they 
are  generally  due  to  irregular  commercial  movements.     These  fluctua 
tions  and  irregularities  are  calamities  to  labor,  disturbing  its  progress, 
and  checking  the  regular  process  of  consumption.     The  whole  credit 
and  money  system,  the  whole  banking  and  paper  currency  system,  in 
tervene  in  the  operation  of  this  commercial  agency.     A  vast  amount  of 
legislation  has  been  expended  upon  these  branches  of  trade,  and  yet  it 
is  conceded  that  all  efforts  have  hitherto  failed  in  reaching  the  true 
policy.     We  venture  to  suggest,  in  passing,  that  the  main  imperfection 
of  banking  and  money  systems,  and  of  the  regulations  which  have  been 
applied  to  them,  is,  that  they  have  been  regarded  too  much  as  indepen 
dent  systems  and  subjects,  and  not  merely  and  strictly  in  the  light  of 
agencies  of  the  industrial  system.     They  have  no  independent  aspects; 
they  are  expensive  agencies,  to  be  reduced  or  got  rid  of  whenever  pos 
sible.     The  work  which  they  are  called  to  assist  in  performing  is  simply 
to  enable  men  to  make  their  exchanges  of  labor,  commodities,  and 
services  with  each  other  in  the  shortest  time,  at  the  least  expense,  and 
with  the  least  trouble  or  friction.     The  credit  system,  in  its  largest 
sense,  is  that  by  which  payment  for  commodities  sold  is  deferred  for 
the  time  expressed  on  the  face  of  bills  of  exchange  and  promissory 
notes,  until,  by  the   operation  of  bank  credits,  checks,  and  book  ac 
counts,  the  debts  are  set  off  one  against  another.     The  whole  transac 
tions  between  two  countries  are  settled  by  set-off  on  the  books  of  the 
drawers  of  bills,  except  the  balance,  which  may  fall  either  way,  which 
remains  to  be  paid.     It  is  the  same  between  different  parts  of  the  same 
country,  and  it  is  the  same  between  individuals.     A  man  may,  without 
money  or  bank-notes,  have  all  the  debts   he  owes  paid  by  the  debts 
which  others  owe  him  :  the  balance  only  remaining  to  be  paid.     It  is 
this  set-off  which  our  present  banking  system  and  exchange  operations 
accomplish,  but  with  an  amount  of  friction  and  fluctuation  which  be 
long  not  to  the  thing  done,  but  are  inherent  in  the  mode  of  doing  it. 
That  this  vast  system  of  credit,  founded  on  the  actual  sale  of  commo 
dities,  the  consumption  of  which  must  proceed  year  after  year  with 
inevitable  certainty,  and  the  payments  for  which  are  as  certain  as  that 
commodity  and  labor  will  pay  for  commodity  and  labor ;   that  in  this 
country  all  these  thousands  of  millions  of  credit  should,  like  an  inverted 


PRELIMINARY    ESSAY. 

pyramid,  be  made  to  stand  upon  less  than  a  hundred  millions  of  specie, 
is  an  absurdity  too  often  felt  and  too  little  comprehended.  It  is  not 
well  understood  that  the  banking  system  of  this  country  is  not  the 
credit  system,  it  is  only  one  of  its  chief  instruments.  However, 
legislation  may  be  needful  to  restrain  the  banks  or  prevent  abuses,  it 
should  not  affect  the  credit  system  at  large.  The  banks  of  this  country 
have  seventy  millions  in  gold,  and  if  a  quarter  of  it  be  taken  from 
them  the  mere  removal  of  this  gold  will  inflict  a  positive  loss  upon 
thousands  of  millions  of  legitimate  credit  operations,  in  no  way  con 
nected  with  the  movement  of  the  gold.  Although  banks  have  in  past 
times  been  of  eminent  advantage  here,  it  may  admit  of  question 
whether,  constituted  as  they  now  are,  their  usefulness  is  not  more  than 
neutralized.  We  refer  not  to  their  management,  nor  even  to  their 
abuses,  but  to  their  constitution.  The  legitimate  credit  operations  of 
the  country  are  maJhly,  and,  in  some  respects,  with  great  advantage, 
performed  on  their  books ;  yet,  by  this  means  so  brought  into  contact 
with  bank  notes  and  bank  circulation,  as  to  be  subjected  to  the  same 
legislative  restraints.  There  is  no  reason  why  bank  credits  should  be 
payable  in  gold  or  silver,  however  necessary  it  may  be  that  bank  notes 
should  be  so  payable.  The  Clearing  House  in  London  pays  off  millions 
of  sterling  daily  by  set-off,  the  banks  in  New  York  and  Philadelphia  do 
the  same  thing;  individuals  in  all  these  cities  are  constantly  doing  the 
same  thing  on  the  books  of  the  banks.  The  efficiency  of  this  set-off 
is  in  no  way  dependent  upon  gold  or  silver.  The  whole  movement  of 
specie  in  Great  Britain  or  in  the  United  States,  does  not  amount  to  one 
mill  per  cent,  of  the  whole  payments. 

The  credit  system  of  the  country  should  not  be  saddled  with  the 
whole  burden  of  the  banking  system.  No  doubt  the  latter  has  been, 
and  is  at  times,  a  very  efficient  implement  of  the  credit  system ;  but 
banking  is  a  corporate  or  private  business,  subject  to  very  great  abuses, 
and  necessarily  placed  under  strict  supervision  and  rigid  restraints. 
The  credit  system  is  the  spontaneous  action  of  individual  confidence 
between  men  over  the  whole  country.  It  is  a  great  public  concern,  an 
interest  which  extends,  until  by  minute  ramifications,  it  reaches  the 
whole  population.  It  is  not  only  not  dependent  on  the  present  banking 
system  for  its  successful  operation,  but  it  can  have  no  worse  injury  in 
flicted  upon  it,  than  being  subjected  to  the  inflations  and  contractions  to 
which  the  banks  are  obliged  to  resort  for  profit  and  for  safety.  Let  the 
credit  system  rest  simply  on  the  industry  of  the  country,  and  on  the 
mutual  confidence  of  the  people,  and  let  such  modes  of  adjusting  its 


Ixxvi  PRELIMINAKY    ESSAY. 

accounts  be  devised,  as  will  not  fall  under  the  influence  of  bank 
fluctuations. 

We  have  seen  that,  apart  from  foreign  trade,  the  population  of  every 
country  supply  their  own  wants  to  the  extent  of  from  ninety  to  ninety- 
nine  per  cent,  of  their  whole  consumption  ;  that  the  business  of  furnish 
ing  this  supply  is  by  extreme  division  of  labor,  apportioned  among  four- 
fifths  of  a  people ;  that  their  internal  trade  consists  in  distributing  these 
products  of  industry ;  that  this  distribution  is  substantially  an  exchange 
among  the  whole  individuals  of  a  population,  of  products  for  products, 
or  products  for  services,  or,  in  the  last  analysis,  of  labor  for  labor;  that 
this  exchange  is  made  by  the  agency  of  merchants,  and  takes  the  shape 
of  sales  and  purchases;  that  is,  leaving  out  of  view  the  medium  of  ex 
change,  men  pay  with  their  own  labor  for  what  they  need  of  the  labor 
of  others ;  that  all  the  agency  of  merchants,  brokers,  banks  and  credit^ 
is  merely  a  means  of  effecting  this  exchange ;  that  the  commodities  or 
labor  thus  exchanged,  are  estimated  at  prices  expressed  in  money  of  ac 
count,  which  prices  are  mainly  governed  by  the  price  of  labor ;  that  upon 
the  regular  movement  of ,  this  exchange,  mainly  depends  the  well-being 
and  comfort,  the  energy  and  productiveness  of  labor;  that  if  this  move 
ment  proceeds  rapidly  and  undisturbed,  production  and  consumption 
will  go  hand  in  hand,  until  individuals  reach  the  full  power  of  both,  and 
a  greater  degree  of  general  comfort  and  competency  be  enjoyed  than  has 
yet  been  known.  We  have  seen,  that  one  of  the  great  disturbing  causes 
of  this  system  of  domestic  distribution,  of  the  comforts  and  necessaries 
of  life,  was  found  in  the  occasional  derangement  of  the  commercial 
agencies  by  which  it  is  effected ;  and  we  have  remarked  upon  the  neces 
sity  of  reforming  that  agency  with  a  view  to  the  interests  of  humanity. 

We  now  proceed  to  consider  another  disturbing  cause.  We  remark 
first,  however,  that  neither  the  labor  nor  the  products  of  labor,  nor  the 
distribution  nor  the  means  by  which  it  is  effected,  are  the  primary  objects 
of  consideration.  The  first  consideration  is  the  people,  then,  in  their 
order,  their  labor,  their  products,  and  the  distribution  of  them.  The 
whole  object  of  their  industry  is  their  well-being.  As  they  can  only 
purchase  by  their  own  labor  what  they  need  of  the  labor  of  others,  it  is 
absolutely  necessary  for  all  to  work ;  whatever  deprives  men  of  the  op 
portunity  of  labor,  deprives  them  of  bread,  and  of  every  other  comfort 
and  necessary  of  life.  Men  consume  freely  and  largely  when  they  are 
fully  paid  for  their  labor ;  that  is,  when  they  can  purchase  for  their 
labor  an  equal  quantity  of  the  labor  of  others ;  in  this  case,  the  nominal 
rate  is  of  little  account,  because  it  is  labor  for  labor.  If  the  25 


PRELIMINARY    ESSAY.  Ixxvii 

millions  of  people  in  the  United  States,  are  consuming  ten  dollars 
worth  each  of  domestic  woollen  goods  annually,  upon  the  manufacture 
of  which,  250,000  of  the  people  are  dependent  for  their  entire  living, 
and  if  it  be  found  that  these  same  goods,  which  cost  at  home  three  dol 
lars,  can  be  purchased  at  two  dollars  per  yard  in  Europe,  then  at  first 
sight  it  would  seem  but  reasonable,  that  the  cheaper  article  should  be 
imported  from  Europe.  To  import  250  millions  of  dollars  worth  is  im 
possible,  because  we  cannot  pay  for  them,  as  we  are  constantly  importing 
more  than  we  can  pay  for,  and  that  sum  is  the  figure  of  our  whole  im 
ports.  We  import  then,*say  ten  per  cent.,  or  25  millions  of  dollars 
worth  of  woollen  goods,  and  sell  them  in  our  great  commercial  marts, 
where  prices  are  chiefly  made,  thirty-three  per  cent,  cheaper  than  the 
domestic  article.  Consumers  fly  to  the  cheaper  article,  and  the  domes 
tic  goods  must  come  down  to  the  same  price.  The  annual  domestic 
product  must  fall  in  price  thirty-three  per  cent.,  and  instead  of  bringing 
its  manufacturers  250  millions,  it  will  only  bring  them  166  millions; 
their  consumption  of  the  products  of  others  must  be  reduced  one-third. 
The  effects  of  this  reduction  will  extend  until  they  are  felt  throughout 
a  whole  nation.  The  importation  of  25  millions  of  cheaper  woollens, 
would  thus  inflict  a  direct  loss  by  reduction  of  price  upon  the  woollen 
manufacturers  of  83  millions  of  dollars,  and  this  loss  is  multiplied  many 
times  by  indirect  results  in  the  reduction  of  consumption.  The  average 
consumption  of  cotton  goods  is  about  the  same  as  that  of  woollens,  and  the 
same  illustration  is  applicable.  The  introduction  of  cheaper  goods,  of  a 
kind  which  our  country  must,  after  all,  chiefly  manufacture  for  itself,  is 
introducing  against  our  own  labor,  the  price  of  which  is  one  dollar  per 
day,  the  labor  of  other  countries,  the  price  of  which  is  less  than  half  a 
dollar  per  day.  This  cannot  but  inflict  a  serious  blow  upon  the  whole 
system  of  our  internal  industry,  and  if  continued,  must  lead  to  the  utter 
prostration  of  the  domestic  manufacture  thus  attacked,  and  the  utter 
poverty  and  ruin  of  the  hundreds  of  thousands  depending  on  it  for  a 
living.  The  effect  of  this  in  the  case  of  woollen  goods,  would  be  a  re 
duction  in  the  average  consumption  of  woollens,  of  from  ten  to  five  dollars, 
for  the  whole  population,  and  a  rise  in  the  prices  above  the  original 
domestic  rates.  Whilst,  therefore,  it  may  at  first  sight  appear  to  be 
very  plainly  better  to  import  certain  goods  which  can  be  offered  to  con 
sumers  at  lower  prices  than  the  corresponding  domestic  article,  several 
questions  must  be  asked  before  such  a  policy  is  adopted.  As ; — will  the 
importation  seriously  injure  any  home  manufacture?  Will  it  throw 
many  people  out  of  employment  ?  It  is  a  great  mistake  to  suppose  that 


Ixxviii  PRELIMINARY    ESSAY. 

such  measures  affect  only  employers :  in  woollen  and  cotton  manufac 
tories,  there  are  hundreds  of  men,  women  and  children,  depending  upon 
every  employer.  If  we  lessen  our  domestic  production,  will  not  our  in 
creased  demand  produce  speculation,  and  a  higher  foreign  price  for  the 
article  imported,?  If  we  resolve  upon  importing  our  whole  supply  of  a 
necessary  article,  are  we  sure  that  we  can  increase  our  exports  to  a  suffi 
cient  extent  to  pay  for  the  additional  importation  ?  Are  we  sure  that 
we  shall  not,  by  this  policy,  deprive  the  poor  of  their  supply  of  a  needful 
domestic  product,  and  convert  it  into  a  foreign  product,  chiefly  supplied 
for  the  consumption  of  the  rich  ?  What  mode^an  be  adopted  to  secure  a 
supply  of  these  needful  articles  in  time  of  war,  or  interrupted  commer 
cial  intercourse  ?  All  these,  and  many  more  inquiries,  should  be  made 
and  faithfully  studied,  before  any  branch  of  domestic  industry  is  broken 
up,  under  the  temptation  of  buying  cheaper  goods  abroad.  On  the  con 
trary,  it  should  be  well  understood  in  every  country,  that  many  sacrifices 
may,  with  advantage,  be  endured,  to  introduce  the  manufacture  of  any 
article  of  general  consumption,  even  though  it  cannot  be  made  as  cheap 
as  elsewhere.  A  manufacture  can  only  grow  and  flourish  in  a  country 
where  the  people  are  willing  to  consume  its  products,  and  they  can  only 
consume  them  when  their  labor  will  purchase  them.  A  people  can  con 
sume  largely  of  a  domestic  product  even  at  a  high  price,  but  may  not 
be  able  to  consume  even  a  small  proportion  of  a  corresponding  foreign 
article  at  a  low  price.  Let  any  one  think  of  the  innumerable  articles 
which  figure  in  our  internal  trade,  and  which  go  to  pay  for,  as  well  as  to 
make  up  our  consumption  of  home  commodities,  and  he  will  see  the 
difference  between  purchasing  abroad  and  at  home. 

The  Indian  corn,  hay,  oats,  butter,  and  potatoes  of  our  agriculture, 
are  worth  at  home  more  than  double  the  value  of  our  whole  foreign 
imports.  If  our  farmers  can  exchange  these  and  such  articles  for  the 
manufactured  products  they  need,  their  consumption  will  be  limited 
only  by  their  industry.  If  they  derive  their  manufactured  commodities 
from  foreign  countries,  they  can  consume  only  to  the  extent  to  which 
their  products  can  be  exported  in  payment.  Pennsylvania  can  consume 
goods  manufactured  in  New  England  freely,  even  at  much  higher  prices 
than  the  foreign  article,  because  she  pays  for  them  in  coal,  iron,  Indian 
corn,  oats,  and  flour.  The  prices  on  both  sides  being  adjusted  at  the 
dollar  a  day  average,  the  exchange  is  equitable,  and  proceeds  to  the  full 
limit  of  the  wants  of  the  parties.  An  interior  county  in  Pennsylvania 
whilst  a  purely  agricultural  county,  has  but  little  that  can  find  its  way 
to  foreign  countries  to  pay  for  manufactured  goods.  But  when  furnaces 


PRELIMINARY    ESSAY. 

are  built,  and  hundreds  or  thousands  of  men  are  employed  in  mining 
and  making  iron,  the  agricultural  commodities  which  before  were  pro 
duced  in  small  quantities,  or  not  sent  abroad  on  account  of  their  bulk  or 
perishable  nature,  are  now  sold  and  consumed  on  the  spot.  These 
agricultural  articles  being  converted  into  iron,  can  be  carried  to  any  of 
our  cities,  or  to  New  England,  and  the  value  brought  back  in  any  desired 
article  of  consumption.  The  people  of  that  county,  before  confined  to 
the  products  of  household  industry,  now  appear  in  the  very  best 
products  of  American  manufacture.  The  price  of  this  exchange  is  not 
important;  it  is  only  necessary  that  it  should  be  fixed  upon  the  same 
elements,  and  that  it  should  be  satisfactory  to  both  parties.  Goods  are 
cheaper  in  England,  but  the  hay,  oats,  butter,  or  turnips  of  an  interior 
district  cannot  be  sent  there  to  pay  for  them ;  neither  can  they  send 
iron :  iron  is  cheaper  in  Scotland,  but  the  people  of  New  England  can 
not  purchase  iron  in  Glasgow  or  Liverpool  with  the  product  of  their 
looms  or  factories. 

The  worst  element  which  can  be  introduced  into  our  system  of  do 
mestic  industry  is  the  element  of  foreign  prices.  It  deranges  and 
diminishes  domestic  production  to  such  extent,  that  in  many  cases 
it  would  be  very  bad  policy,  nay,  great  injustice,  to  the  industrial 
classes,  to  accept  and  distribute  the  goods  to  every  consumer  free  of 
charge.  The  entire  foreign  trade  of  the  United  States,  or  of  any  other 
country,  is  of  small  consequence,  compared  with  the  regular  movement 
of  the  labor  of  the  country;  100,000  persons  thrown  out  of  employ 
ment  for  a  year  is  a  loss  to  the  wealth  of  the  country  equal  to  the  value 
of  the  whole  foreign  trade.  Yet,  so  little  has  this  aspect  of  the  subject 
been  regarded,  so  little  has  the  importance  of  our  domestic  industry 
been  understood,  that  it  will  be  safe  to  say,  that  there  are  more  than 
500,000  laborers  idle,  or  but  partially  employed,  every  year  in  the 
United  States,  because  they  cannot  work  in  competition  with  the  cheaper 
labor  which  is  let  in  from  other  countries.  Our  domestic  production, 
now  estimated  by  some  at  2500  millions  of  dollars,  might,  whether  the 
above  be  the  true  amount  or  not,  be  increased  one-half  under  a  firmly 
sustained  domestic  system,  and  our  population,  instead  of  consuming 
one  hundred  dollars  worth  for  each  head,  might  consume  a  hundred  and 
fifty  dollars  each.  It  would  be  the  result  of  a  domestic  exchange  of 
commodities,  the  prices  of  which  would  range  according  to  the  domestic 
price  of  labor;  and  the  benefits,  instead  of  being  confined  mainly  to  the 
rich,  would  extend  to  every  grade  of  laborers.  The  effect  of  foreign 
importations  upon  this  great  system  is  to  check,  derange,  and  diminish 


1XXX  PRELIMINARY    ESSAY. 

the  domestic  production  to  many  times  the  amount  imported.  "We  re 
ceive  from  abroad  250  millions  worth  of  foreign  goods,  and  the  people 
probably  make  and  consume  500  millions  worth  less  than  they  would 
if  they  imported  none  at  all.  We  believe  that  a  domestic  system  of 
industry,  thoroughly  built  up  and  defended,  would  in  the  end  sustain  a 
larger  foreign  trade  than  can  ever  be  reached  by  the  path  of  national 
competition.  Foreign  trade  should  be  the  overflowing  of  domestic 
industry,  and  not  a  machine  to  cramp  its  powers  and  paralyze  its 
efficiency. 

We  are  not  unfriendly  to  foreign  trade  or  international  commerce. 
We  advocate  not  the  prohibition  of  foreign  commodities,  nor  high  duties 
upon  foreign  goods.  We  merely  avoid  beginning  at  the  wrong  end  of 
our  subject.  Knowing  that  the  people  of  every  nation  must  provide 
mainly  for  their  own  wants,  that  they  must  live  mainly  upon  the  pro 
ducts  of  their  own  industry,  that  the  labor  which  supplies  a  civilized 
people  with  food,  raiment,  shelter,  and  furniture,  suitable  for  civilized 
men,  must  be  subdivided  to  be  efficient  and  productive;  that  a  whole  popu 
lation  can  only  be  abundantly  supplied  by  a  mutual  exchange  of  labor  or 
its  products,  by  which  each  man  has  an  opportunity  of  exchanging  his 
own  labor  for  the  articles  he  needs;  that  production  can  only  be  large 
and  consumption  great  where  the  consumers  are  near  to  their  food,  that 
is,  where  agriculturists,  manufacturers,  mechanics,  and  laborers,  are  not 
too  widely  separated,  and  where  the  other  classes  are  near  enough  to 
the  agriculturists  to  consume  every  product  of  the  soil  which  skilful 
farming  produces :  we  believe  the  first  question  in  regard  to  any  nation 
is  not  whether  its  foreign  trade  is  free,  whether  duties  upon  foreign 
goods  are  high  or  low,  but  whether  its  people  are  well  supplied  with  the 
necessaries  and  comforts  of  life ;  whether  domestic  industry  is  so  ar 
ranged  that  no  considerable  number  of  persons  willing  to  labor  are 
without  employment ;  whether  all  are  able,  whilst  earning  a  comfortable 
subsistence  for  themselves,  to  contribute  by  their  labor  to  that  abundance 
which  is  enjoyed  by  all;  these  are  more  important  considerations  than 
any  belonging  to  foreign  trade,  or  duties,  or  tariffs. 

If  we  have  failed  in  making  our  views  of  the  importance  and  efficacy 
of  a  system  of  domestic  production  plain  and  acceptable  to  the  common 
sense  of  our  readers,  we  shall  resort  to  an  illustration,  for  which  we 
need  not  leave  our  own  country.  The  great  planting  States  of  our 
confederacy  have  not  cherished,  and  do  not  possess,  what  we  call  a 
system  of  domestic  industry.  They  rely  upon  trade  to  carry  off  their 
surplus  products  to  the  North  or  to  Europe,  and  bring  back  to  them  an 


PRELIMINARY    ESSAY.  kxxi 

equivalent  in  such  articles  as  they  require.  Theirs  is  not  a  domestic 
system.  That  we  may  see  the  effects  of  the  two  systems  thus  in  opera 
tion  side  by  side,  we  shall  place  some  of  the  results  face  to  face.  We 
compare  the  Eastern  and  Middle  States  with  the  Northern  and  Southern ; 
that  is,  Maine,  New  Hampshire,  Vermont,  Massachusetts,  Connecticut, 
Rhode  Island,  New  York,  New  Jersey,  Pennsylvania,  Delaware,  Mary 
land,  and  the  District  of  Columbia,  with  Virginia,  North  Carolina, 
South  Carolina,  Georgia,  Florida,  Alabama,  Mississippi,  Louisiana, 
Texas,  Arkansas,  and  Tennessee.  We  take  the  facts  relied  upon  from 
the  census  of  1850  :  — 

Eastern  and  Middle  Southern  and  South- 

States,  western  States. 

Population 9,353,104       7,273,954 

Territory  in  square  miles 179,662       733,144 

Land  under  culture,  acres 37,350,000       42,000,000 

Valuation  of  cultivated  lands $959,000,000       $243,000,000 

Average  value  of  cultivated  land  per  acre  $24.17      $5.80 

Annual  product  of  manufactures,  min- )  $746)715jooo  $79,958,000 

ing  and  mechanic  arts S 

Average  crop  per  acre  of  Indian  corn,  >  27  17 

bushels , > 

Average  crop  of  Irish  potatoes ;  bushels  119       116 

Let  this  comparison  be  extended  to  the  whole  range  of  agricultural 
products,  including  cotton,  sugar  and  tobacco,  the  staples  of  the  South; 
it  will  be  found  that,  though  the  labor  of  the  South  is  mainly  applied 
to  agriculture,  and  though  there  is  in  the  South  nearly  five  millions  of 
acres  more  of  land  under  culture,  yet  the  product  of  the  two  regions 
is  widely  different  in  value,  a  great  advantage  in  point  of  quantity  and 
variety  being  on  the  side  of  the  North ;  a  variety  not  only  conducive  to 
comfort,  but  a  great  stimulus  to  exchange  and  increased  production.  The 
South,  with  the  advantage  of  a  superior  climate,  more  fertile  lands,  a 
larger  breadth  in  cultivation,  and  more  labor  applied  to  it,  is  only  able 
for  the  supply  of  all  its  wants  to  equal  the  agricultural  products  of  the 
North ;  and  is,  therefore,  only  able  to  import  from  the  North  and  from 
Europe,  to  the  extent  she  can  spare  of  that  agricultural  product.  The 
Eastern  and  Middle  States  have,  however,  in  addition  to  their  agricul 
tural  product  equal  to  that  of  the  South  in  value,  and  far  superior  in 
its  fitness  to  promote  human  comfort,  been  able  by  their  own  labor,  to 
produce  a  quantity  of  manufactures  valued  at  $746,715,000.  This  is 
clear  gain  to  the  people  of  the  North  over  those  of  the  South.  By 
mingling  manufacturing  with  agricultural  industry,  Northern  labor  has 


Ixxxii  PRELIMINARY    ESSAY. 

been  so  stimulated,  and  so  aided  by  steam  and  water-power  with  in 
creasing  skill  and  intelligence,  that  the  product  of  Northern  industry  is 
now  more  than  double  that  of  the  South. 

Imperfect  as  the  figures  of  the  last  census  are  admitted  to  be,  and  es 
pecially  unfavorable  to  the  North,  from  the  increased  difficulty  of  reach 
ing  all  the  variety  and  ramifications  of  Northern  industry,  enough  is 
shown  to  satisfy  the  most  cautious  inquirer,  that  the  agricultural  pro 
ducts  of  the  two  regions,  now  the  subject  of  comparison,  are  about  equal 
for  each  head  of  the  population.  This  will  not  be  thought  strange, 
when  we  note  that  the  crops  of  hay,  wheat,  wool,  and  the  products  of 
the  dairy  in  the  North,  together  exceed  in  value  the  great  staples  of  the 
South,  cotton,  sugar,  rice  and  tobacco.  If  we  take  the  agricultural  pro 
duction  in  these  two  great  sections  at  $60  per  head,  which  was  about 
the  average  of  the  United  States  in  1850,  we  find  the  whole  agricul 
tural  product  of  the  South  and  South-western  States,  to  be  worth 
$435,180,000.  To  this,  add  $79,958,000,  the  value  of  Southern  manu 
factures,  and  we  have  the  sum  of  Southern  industry,  $515,138,000 ; 
which,  divided  by  the  population  of  1850,  gives  an  annual  consump 
tion  for  each  individual  of  $73.59.  This  includes,  of  course,  the  valuo 
of  all  articles  imported  from  the  North,  or  from  any  other  part  of  the 
world,  for  they  were  obtained  by  the  export  of  a  portion  of  the  agricul 
tural  commodities  valued  at  the  above  sum  of  $435,180,000. 

At  the  same  rate  of  $60  per  head  of  the  population,  the  agricultural 
production  of  the  Eastern  and  Middle  States,  amounts  to  $561,180,000. 
Add  to  this,  the  product  of  their  manufacturing  industry,  stated  above 
at  $746,715,000,  and  we  obtain  the  sum  of  Northern  industry  for  the 
same  year,  $1,307,895,000 ;  which,  divided  by  the  population  of  those 
States,  gives  a  consumption  for  each  individual  of  $145.32,  or  nearly 
double  the  consumption  of  individuals  in  the  South.  This  is  a  result 
due  chiefly  to  a  domestic  system  of  industry,  by  which  the  articles  con 
sumed  are  mainly  supplied  at  the  place  of  consumption ;  it  is  due  to  the 
difference  on  the  one  hand,  between  sending  the  raw  materials  of 
agriculture  to  a  market  hundreds  or  thousands  of  miles  from  the  soil 
on  which  they  are  grown,  between  paying  for  needful  articles  with  the 
proceeds  of  such  sale ;  and  on  the  other  hand,  manufacturing  the  raw 
materials  where  they  are  grown,  and  paying  for  other  articles  of  con 
sumption  by  an  exchange  of  products  of  labor  between  agriculturists 
and  manufacturers. 

But  the  people  of  the  North  enjoy  another  striking  advantage  derived 
from  their  system.  The  value  of  their  cultivated  lands  is  $959,000,000 ; 


PRELIMINARY    ESSAY.  Ixxxiii 

which,  divided  by  the  population,  gives  for  each  individual  of  the  North 
ern  population,  the  value  of  $106.  The  Southern  lands  are  valued  at 
$243,000,000,  which  gives  for  each  individual  834. 

Without  running  the  parallel  farther,  which  might  be  done  with  in 
structive  results  through  the  whole  field  of  Northern  and  Southern  in 
dustry,  we  may  sum  it  all  up  in  a  few  words. 

The  North  is  thrice  as  rich  in  land  as  the  South,  ten-fold  as  rich  in 
manufacturing  power,  and  possesses  an  immense  capital,  capable  of  being 
applied  with  facility  to  any  branch  of  industry  ;  a  capital  for  which 
there  is  no  equivalent  in  the  South.  The  North  is  independent,  self- 
sustaining,  and  powerful ;  the  South  is  the  opposite  of  this.  The  North 
has  great  maritime  wealth  and  power;  the  South,  nothing  of  the  kind. 
The  North  is  yearly  growing  richer ;  the  South,  as  a  whole,  is  yearly 
becoming  poorer.  Northern  industry  flourishes  on  the  same  spot,  and 
its  poor  lands  become  richer  and  more  valuable;  Southern  industry 
only  flourishes  on  new  lands,  and  its  poor  lands  become  poorer. 

This  comparison  is  not  counteracted  by  placing  the  value  of  slaves  to 
the  account  of  the  Southern  States.  Northern  laborers  are  worth  more 
in  the  view  we  are  taking,  than  Southern  slaves.  The  difference  is  that 
Northern  men  are  owners  of  their  own  labor,  which  is,  in  part,  the  capi 
tal  we  are  estimating;  and  in  the  South,  the  labor  of  most  of  the 
laborers  belongs  to  capitalists. 

Whatever  disadvantages  are  connected  with  the  labor  of  African 
slaves,  as  compared  with  that  of  civilized  men  of  the  white  race,  we  are 
far  from  believing  that  the  great  contrast  in  the  wealth  and  annual  con 
sumption  of  the  people  of  the  North  and  South,  is  due  to  the  fact  of 
slave  labor.  We  place  it,  without  hesitation,  to  the  infatuation  which 
possesses  the  people  of  the  South  for  foreign  commerce, — an  infatuation 
which  induces  men  to  act  as  if  exchanging  half  a  million  in  goods,  for 
half  a  million  in  goods,  the  export  and  import  amounting  to  a  million, 
were  equally  as  advantageous  as  the  actual  production  of  a  million  of 
goods.  One  Lowell  would  be  worth  to  the  South  three  times  the  in 
vestment  of  a  similar  amount  in  shipping  for  the  foreign  trade,  whether 
clippers  or  steamers.  The  great  want  of  the  South  is  not  so  much  the 
means  of  sending  products  to  market,  as  an  increase  of  production  and 
a  home  maaket.  So  long  as  the  South  relies  upon  an  European  market 
for  cotton,  cultivated  land  there  will  average  not  over  $6  per  acre.  When 
the  South  manufactures  one-half  the  crop  of  cotton  and  the  North  manu 
factures  the  other  half,  Southern  lands  will  average  thirty  dollars  per 
acre.  If  the  South  will  but  increase  the  annual  product  of  her  manu- 


Ixxxiv  PRELIMINARY    ESSAY. 

factures  to  $500,000,000,  the  increased  price  of  Southern  lands  will  pay 
for  the  whole  investment  involved  in  this  increased  production. 

The  South  has  almost  every  assistance  the  world  can  give,  to  become  a 
people  of  great  wealth  and  power.  These  States  have  it  in  their  power  to 
double  ,the  value  of  their  agricultural  production,  and  increase  their  manu 
facturing  power  ten-fold.  This  could  be  done  in  twenty-five  years.  The 
result  of  this  policy  would  be  a  white  population  far  superior  to  the 
present,  and  a  blessing  to  the  African  race  in  the  South,  beyond  any 
speck  of  hope  now  in  their  horizon.  The  next  generation  of  slaves 
would  grow  up  civilized,  and  being  civilized,  their  masters  would  eman 
cipate  them  as  rapidly  as  their  best  friends  could  desire.  Their  owners 
would  find  it  cheaper  to  hire  them  than  to  keep  them,  and  they  would 
find  in  them,  safe  purchasers  of  their  estates.  This  would  be  the  solu 
tion  of  the  slave  question.  The  masters  would  have  been  paid  for  their 
slaves  by  civilizing  them. 

S.  C. 

PHILADELPHIA,  February  14,  1856. 


NOTE. 

In  the  apparently  hasty  survey  of  some  of  the  leading  works  upon  Political  Economy  submitted  to  the 
reader  in  the  foregoing  Essay,  we  have  attempted  to  give  the  results  of  a  previous  examination  of  much 
wider  compass.  Having  had  in  preparation  for  some  time  a  Survey  of  Political  Economy,  with  a  view  to 
ascertain  its  value  as  a  science  and  as  an  art,  we  found  it  could  not  be  completed  short  of  two  volumes. 
This,  of  course,  included  the  principal  topics  of  Political  Economy,  as  well  as  its  general  scope.  The  dif 
ferences  of  opinion  among  writers  can  no  more  be  reconciled  upon  the  subjects  of  labor,  production,  value, 
rent,  distribution,  money. credit,  banking,  prices,  trade,  population,  and  other  important  topics,  than  upon  the 
nature  of  the  science  and  its  general  scope.  In  the  further  prosecution  of  this  subject,  there  is  no  more 
interesting  task  than  the  appreciation  of  the  labors  of  that  very  distinguished  School  of  Political  Economists 
which  has  its  centre  in  Paris.  If  industry,  zeal,  talents,  learning,  and  great  ability,  could  have  carried  Po 
litical  Economy  out  of  its  labyrinth  of  inconsistencies,  these  writers  must  ere  now  have  succeeded.  We 
are  indebted  to  them  for  the  "Journal  des  Eronomistes,"  begun  in  1841,  and  now  in  its  forty-sixth  volume;  it 
has  been  conducted  with  a  fairness  and  ability,  to  which  the  most  remarkable  exception  which  occurs  to  us 
was  the  attack  upon  Henry  Richelot.  Having  been  a  subscriber  from  its  beginning,  we  can  testify  to  its 
merits,  though  we  by  no  means  partake  of  the  leading  opinions  of  its  contributors.  Our  casual  exception  to 
some  of  its  articles,  on  a  previous  page,  was  not  intended  as  a  reproach  to  the  Journal.  The  same  School 
which  sustains  this  Journal  and  the  same  eminent  publisher,  Guillaumin,  has  given  to  the  world  the  "  Col 
lection  des  Principaux  Econr;misies,''  in  fifteen  large  volumes,  equal  to  fifty  ordinary  8vo.  volumes;  the 
*•  Annuaire  de  I' Economie  Politique,"  commencing  with  the  year  1844,  and  regularly  continued,  being  an  in 
valuable  repository  of  economical  and  statistical  information  ;  the  "  Dictionnaire  du  Commerce,"  in  two  thick 
8vos. ;  the  "  Collection  des  Economistes  et  Publicistes  Cotemporains,"  in  upwards  of  thirty  volumes,  8vo. ;  and 
lastly,  the  "  Dictionnaire  de  Economie  Politique,"  in  two  royal  8vos.,  of  nearly  nine  hundred  pages.  This  work 
confers  an  obligation  upon  students  of  Political  Economy  which  can  never  be  too  highly  appreciated.  In 
the  hands  of  the  men  who  have  edited,  written,  or  aided  the  publisher  in  the  Herculean  task  of  giving  to 
the  world  such  a  mass  of  works,  original  and  selected,  upon  the  subject  of  Political  Economy,  it  would 
eeem  as  if  the  subject,  or  the  science,  should  have  made  vast  progress.  But  this  great  force  of  talent,  this 
wonderful  industry,  this  mass  of  publications,  have  accomplished  much  less  for  Political  Economy  than  might 
have  been  expected  from  the  power  exerted.  Read  the  article,  "  Economie  Politique,"  in  the  Dictionary  of 
Political  Economy,  and  the  complaints  of  the  editor  of  the  "Journal  des  Economistes,"  at  page  nine  of  the 
number  for  January,  1856.  He  laments,  that  whilst  Political  Economy  speaks  by  millions  of  voices  in  Eng 
land,  only  one  or  two  Professorships  are  devoted  to  it  in  France.  The  Political  Economy  here  spoken  of  is 
Free  Trade,  which,  being  the  true  policy  of  England,  is  the  voice  of  millions.  The  millions  of  France, 
under  the  teaching  of  common  sense,  reject  it.  The  error  of  these  French  Economists  is,  that  they  desert 
the  very  elements  of  their  science  for  the  sake  of  Free  Trade,  which  can  neither  be  a  principle  nor  a  law 
of  science.  It  belongs  to  the  domain  of  public  authority  and  public  policy.  Their  views  are  thus  developed 
from  an  unstable  element  which  does  not  belong  to  the  science.  The  well-being  of  men  is  not  to  be  sought 
through  Free  Trade,  though  Free  Trade  may  be  reached  through  human  well-being.  The  Political  Eco 
nomy  of  this  School  "would  grind  France  to  powder"  as  rapidly  now  as  in  the  days  of  the  First  Napoleon. 
We  trust  the  present  wise  Ruler  of  France  may  see  this  as  plainly  as  did  his  illustrious  predecessor. 

Av     U-  Vvy      #X  Jl+-t  > 

//  ffH^r^t^.. 


.^*    flA^vf/U-    ?4 


INTRODUCTION. 


Et  la  patrie  et  1'humanitSl 

No  branch  of  political  economy  presents  a  greater  diversity 
of  views  between  men  of  theory  and  men  of  practice,  than  that 
which  treats  of  international  commerce  and  commercial  policy. 
There  is,  however,  in  the  domain  of  this  science  no  topic,  which, 
in  regard  to  the  well-being  and  civilization  of  nations,  as  well 
as  to  their  independence,  power  and  duration,  presents  the  same 
degree  of  importance.  Poor,  weak,  and  uncivilized  countries 
have  not  unfrequently  attained  power  and  wealth  by  a  judicious 
commercial  system,  whilst  others  have  sunk  from  a  high  rank 
for  want  of  such  a  system ;  nations  have  even  lost  their  inde 
pendence,  and  their  political  existence,  because  their  commercial 
policy  had  not  aided  the  development  and  the  consolidation  of 
their  nationality. 

In  our  day,  more  than  at  any  former  period,  among  all  the 
questions  which  belong  to  political  economy,  that  of  international 
commerce  has  acquired  a  preponderant  interest;  for  the  more 
rapidly  the  genius  of  discovery  and  of  industrial  improvement,  ^ 
as  well  as  that  of  social  and  political  progress  advances,  the 
more  rapidly  is  the  distance  between  stationary  nations  and  those 
which  are  progressive  increased,  and  the  greater  is  the  peril  of 
remaining  behind.  If  in  time  past  it  required  centuries  to  mo 
nopolize  that  important  branch  of  industry,  the  manufacture  of 
wool,  some  ten  years  have  sufficed  in  our  time  to  obtain  ascen 
dency  in  the  much  more  considerable  manufacture  of  cotton ; 
and  now  the  start  of  a  few  years  may  enable  England  to  absorb 
all  the  flax  industry  of  the  continent  of  Europe. 

(61) 


62  INTRODUCTION. 

At  no  other  epoch  has  the  world  seen  a  manufacturing  and 
commercial  power  possessing  resources  so  immense  as  those  in 
the  control  of  the  power  which  now  holds  sway,  pursuing  de 
signedly  a  system  so  consistently  selfish,  absorbing  with  such 
untiring  energy  the  manufacturing  and  commercial  industry 
of  the  world,  the  important  colonies,  the  domination  of  the  seas, 
and  subjecting  so  many  people,  as  in  the  case  of  the  Hindoos, 
to  a  manufacturing  and  commercial  yoke. 

Alarmed  by  the  consequences  of  that  policy,  nay,  con 
strained  by  the  convulsions  it  has  occasioned,  we  have  seen  in 
our  century,  Prussia,  a  continental  nation,  as  yet  imperfectly 
prepared  for  manufacturing  industry,  seeking  her  welfare  in  the 
prohibitory  system  so  condemned  by  theorists.  And  what  has 
been  her  reward  ?  National  prosperity. 

On  the  other  hand,  encouraged  by  promises  of  theory,  the 
United  States  of  America,  which  had  made  a  rapid  growth  under 
the  protective  system,  have  been  induced  to  open  their  ports  to 
the  manufactures  of  England ;  and  what  fruits  has  this  competi 
tion  borne  ?  A  periodical  visitation  of  commercial  disaster. 

Such  experience  is  well  calculated  to  provoke  doubts  of  the 
infallibility  which  theory  arrogated  to  itself,  and  of  the  absurdity 
it  imputes  to  practice ;  to  create  fears  lest  our  nationality  be  in 
danger  of  perishing  by  an  error  of  theory,  like  the  sick  man, 
who  by  conforming  to  a  printed  prescription  died  of  an  error  of 
the  press :  to  arouse  suspicion  that  this  boasted  theory  has  at 
tained  its  large  growth  only  for  the  Trojan-Horse  purpose  of 
concealing  arms  and  soldiers,  and  inducing  us  to  take  down, 
with  our  own  hands,  the  walls  which  protect  us. 

At  least  this  truth  is  evinced :  during  the  half  century  in 
which  this  great  question  of  commercial  policy  has  been  dis 
cussed  in  all  civilized  nations,  in  books  and  in  legislative  halls, 
by  the  shrewdest  minds,  the  abyss,  which,  since  Quesnay  and 
Smith  has  separated  theory  from  practice,  not  only  has  not  dis 
appeared,  but  has  actually  grown  wider  every  year.  What  kind 
of  science  is  that  which  sheds  no  light  upon  the  path  which 
practice  must  follow  ?  Is  it  reasonable  to  suppose  that  the  pro 
fessors  of  this  science,  by  the  mighty  power  of  their  intelligence, 


INTRODUCTION.  63 

have  everywhere  become  exactly  acquainted  with  all  that  per 
tains  to  social  life  and  industry,  whilst  the  men  of  the  world, 
mingling  freely  in  all  the  outward  concerns  of  life,  unable 
to  comprehend  the  truth  discovered  and  brought  to  light  by  the 
former,  have  continued  from  generation  to  generation  to  mistake 
evident  errors  for  truth  ?  Is  it  not  better  to  acknowledge 
that  practical  men,  too  much  inclined  in  general  to  adhere  to  the 
actual,  would  not  so  long  and  so  obstinately  have  resisted  theory, 
if  theory  itself  had  not  been  in  opposition  to  truth  and  nature. 

Indeed  we  do  not  hesitate  to  aver  that  the  contradiction  be 
tween  theory  and  practice  in  regard  to  commercial  policy,  is  as 
much  the  fault  of  theory  as  of  practice. 

Political  economy,  in  matters  of  international  commerce,  must 
draw  its  lessons  from  experience ;  the  measures  it  advises  must 
be  appropriate  to  the  wants  of  our  times,  to  the  special  condi 
tion  of  each  people ;  it  must  not,  however,  disavow  the  exigen 
cies  of  the  future  nor  the  higher  interests  of  the  whole  human 
race.  Political  economy  must  rest  consequently  upon  Philosophy, 
Policy,  and  History. 

For  the  interests  of  the  future  and  the  welfare  of  men,  phi 
losophy  requires  a  more  intimate  union  and  communion  of  na 
tions,  a  renunciation  of  war  so  far  as  possible,  the  establishment 
and  development  of  international  law,  transition  of  the 
jus  gentium  to  a  federal  law,  freedom  of  communication 
among  nations,  as  well  in  moral  as  in  material  concerns ;  lastly, 
the  union  of  all  nations  under  some  rule  of  law,  or  in  some 
aspects  of  the  subject,  a  universal  association. 

In  the  case  of  any  particular  people,  a  wise  administra 
tion,  with  extended  views,  pursues  special  objects,  seeking 
guarantees  for  independence  and  for  duration,  measures  cal 
culated  to  hasten  progress  in  civilization,  well-being,  and  power, 
and  to  improve  social  condition  so  that  the  body  politic  shall 
be  completely  and  harmoniously  developed  in  all  its  parts,  perfect 
in  itself,  and  politically  independent. 

History,  for  its  part,  assists  in  no  equivocal  manner  in  pro 
viding  for  the  exigencies  of  the  future,  by  teaching  how,  in  every 
epoch,  progress,  material  and  intellectual,  has  kept  pace  with 


64  INTKODTTCTION. 

the  extent  of  political  association  and  commercial  relations. 
But  it  justifies  at  the  same  time  the  exigencies  of  government 
and  nationality,  showing  how  nations  have  perished  for  not  having 
sufficiently  watched  over  the  interests  of  their  culture  and 
power ;  how  a  commerce  entirely  free  with  nations  more  ad 
vanced  has  been  of  advantage  to  those  still  in  the  first  phases 
of  their  development ;  also  how  those  which  had  made  some  pro 
gress  have  been  able  by  proper  regulations  in  their  foreign  trade, 
/  to  make  still  greater  progress  and  to  overtake  those  which  had 
preceded  them.  History  thus  shows  the  way  of  reconciling  the 
respective  exigencies  of  philosophy  and  government. 

But  practice  and  theory,  such  as  actually  exhibited,  take 
their  sides,  the  former  exclusively  for  the  particular  exigencies 
of  nationality,  the  latter  for  the  absolute  requirements  of 
cosmopolitism. 

That  practice,  which  is  called  by  the  theorists  the  mercantile 
system,  commits  the  grave  error  of  maintaining  the  universal 
utility  and  necessity  of  restrictions,  because  they  have  been 
useful  and  necessary  in  certain  nations  and  in  certain  periods 
of  their  development.  Its  votaries  fail  to  see  that  restrictions 
are  but  means,  and  that  liberty,  in  its  proper  sense,  is  the  end. 
Considering  the  nation  by  itself,  and  not  humanity  at  large, 
the  present  alone,  and  not  the  future,  it  is  exclusively  political 
.  and  national ;  it  has  no  philosophical  comprehension,  no  cosmo 
politan  tendency. 

The  prevailing  theory,  on  the  contrary,  as  it  has  been  sug 
gested  by  Quesnay,  and  elaborated  by  Adam  Smith,  is  exclu 
sively  preoccupied  with  the  cosmopolitan  exigencies  of  even 
the  most  remote  future.  Universal  association  and  abso 
lute  free  trade,  may  possibly  be  realized  centuries  hence; 
their  theory  regards  them  as  realizable  now.  Overlooking  the 
necessities  of  the  present  and  the  idea  of  nationality,  they  lose 
sight  of  the  nation,  and  consequently  of  the  education  of  a 
J  nation  with  a  view  to  its  independence.  In  its  exclusive  cosmopo 
litism,  this  theory  always  regards  the  whole  family  of  nations, 
the  well-being  of  the  whole  race,  never  the  nation  nor  national 
prosperity;  it  abhors  government,  it  condemns  experience  and 


INTRODUCTION.  65 

practice  as  mere  routine.  Not  considering  historical  facts,  ex- 
c<5pt  so  far  as  they  respond  to  its  particular  tendencies,  it  knows 
not  or  disfigures  the  lessons  of  history  which  are  opposed  to  its 
system ;  it  is  under  the  necessity  of  denying  the  effects  of  the 
Act  of  Navigation,  of  the  Treaty  of  Methuen,  of  the  commer 
cial  policy  of  England  in  general,  and  of  maintaining  against 
all  truth  that  England  has  arrived  to  wealth  and  power  in  spite 
of  that  policy  and  not  by  it. 

Once  fully  acquainted  with  what  is  exclusive  in  the  one  or  in 
the  other  of  these  systems,  we  cannot  be  astonished  if,  in  spite 
of  its  grave  errors,  practice  has  not  acquiesced  in  any  reform 
proposed  by  theory ;  and  we  shall  comprehend  why  theory  has 
not  been  willing  to  heed  the  voice  of  history  or  of  experience, 
or  of  government,  or  of  any  particular  nation.  If  this  vague 
theory  has  been  proclaimed  in  all  our  streets  and  upon  the 
house-tops,  and  especially  among  the  nations  of  which  it  has 
most  endangered  the  existence,  it  may  account  for  the  decided 
propensity  of  the  age  for  philanthropic  experiments  and  the 
the  study  of  philosophical  problems. 

But  in  the  life  of  nations,  as  well  as  in  that  of  individuals, 
there  are  two  powerful  remedies  for  the  illusions  of  ideology, 
experience  and  necessity.  If  we  mistake  not,  the  nations  which 
recently  hoped  to  find  their  advantage  in  free  trade  with  the 
great  manufacturing  and  trading  powers,  are  on  the  verge  of 
important  experiences. 

It  is  merely  impossible  for  the  United  States,  if  they  perse 
vere  in  their  actual  commercial  system,  to  maintain  even  tolerable 
order  in  their  national  economy.  There  is  no  effective  remedy  but 
a  return  to  the  doctrine  of  protecting  their  own  industry.  In. 
vain  will  the  States  of  the  South  resist  and  a  dominant  party 
object :  the  power  of  events  must  prevail.  We  fear  that  soon  or 
late,"  war  will  solve  a  question  which  proves  a  Gordian  knot  for 
legislatures.  America  may  possibly  pay  a  future  balance 
with  powder  and  lead ;  the  prohibitions  which  must  accompany 
war  may  remedy  a  defective  tariff,  and  the  conquest  of  Canada 
may  for  ever  terminate  the  vast  system  of  English  contraband 
traffic  announced  by  Huskisson. 
5 


66  INTRODUCTION. 

Would  we  were  mistaken  !  but  if  our  prophecy  should  be  ful 
filled,  the  theory  of  free  trade  must  be  made  accountable  for 
that  war.*  Strange  irony  of  fate  !  if  a  theory,  based  upon  the 
grand  idea  of  an  everlasting  peace,  should  kindle  war  between 
two  nations  so  well  fitted,  according  to  theorists,  for  mutual 
trade,  it  would  only  be  comparable  with  that  philanthropic  abo 
lition  of  the  slave  trade  by  which  thousands  of  negroes  were 
doomed  to  the  bottom  of  the  sea.f 

In  the  course  of  the  fifty,  or  rather,  of  the  last  twenty-five 
years  (for  it  is  difficult  to  take  into  account  the  period  of  revo 
lution  and  war),  France  has  resorted,  upon  a  grand  scale,  to  the 
system  of  restriction,  with  its  errors,  its  exuberances,  and  its 
exaggerations.  Its  success  is  obvious  to  every  observer.  The 
ory  may  question  it,  nay,  it  must  question  it,  unless  it  be  incon 
sistent  with  itself.  If  it  has  had  the  boldness  to  assert  and  to 
persuade  the  world  that  England  has  become  rich  and  powerful 
in  spite  of,  and  not  in  virtue  of  her  commercial  policy,  how  can 
it  hesitate  to  maintain  a  position  much  easier  of  proof,  that  is, 
that  without  protection  for  her  manufactures,  France  would  be 

*  Our  Author  is  not  the  only  political  economist  who  has  ventured  this 
prediction.  Who  can  say  that  it  would  not  have  been  verified  but  for  the 
important  events  now  transpiring  in  Europe.  Indications  of  quarrel  are 
not  wanting.  —  S.  C. 

f  Would  it  not  have  been  more  appropriate  to  take  this  occasion  to  re 
commend  to  planters  a  slavery  less  severe,  the  yielding  to  slaves  some 
portion  of  the  soil  they  cultivate,  a  certain  degree  of  personal  liberty ;  in 
a  word,  the  establishment  of  a  servitude  softened  by  the  prospect  of  future 
emancipation,  and  the  gradual  preparation  of  the  negro  for  the  plenitude 
of  liberty?  Were  the  negroes  less  slaves  in  Africa  than  they  are  in  the 
American  plantations  ?  Is  the  transition  from  a  state  of  nature  to  a  state 
of  civilization  possible  for  a  barbarous  people  without  some  intermediate 
rigorous  discipline  ?  Is  it  possible  by  acts  of  parliament  to  transform  the 
black  slaves  of  the  West  Indies  into  free  laborers  ?  Have  men  been  trained 
in  that  way  in  the  past  history  of  the  world  for  liberty  and  labor  ?  The  Eng 
lish  are  no  such  strangers  to  the  history  of  civilization  as  not  to  have  con 
sidered  that  question  satisfactorily  for  themselves  long  since.  It  is  evident 
that  what  they  have  done  and  what  they  are  doing  for  the  abolition  of 
slavery  has  had  very  different  motives  from  those  of  pure  philanthropy,  as 
we  shall  yet  have  occasion  to  show.  —  H.  R. 


INTRODUCTION.  67 

incomparably  richer  and  more  flourishing  than  she  is  at  this  mo 
ment.  Although  enlightened  and  experienced  statesmen  deny 
the  correctness  of  this  conclusion,  many  reputed  to  be  well- 
informed  and  judicious,  receive  it  for  sound  doctrine ;  and,  truth 
to  say,  in  France  at  this  very  hour,  not  a  few  seem  to  sigh  for 
the  blessings  of  free  trade  with  England.  It  would  be  difficult 
to  dispute,  and  upon  that  subject  we  shall  go  into  some  details 
hereafter,  that  greater  activity  in  their  commercial  relations 
must  prove  in  many  respects  an  advantage  to  both  nations.  It 
is,  however,  obvious  that  England  desires  an  exchange,  not 
merely  of  raw  materials,  but  rather  a  trade  by  which  she  may 
furnish  a  great  quantity  of  manufactured  goods  of  general  con 
sumption,  in  exchange  for  the  agricultural  products  and  the 
fancy  goods  of  France.  If  the  government  of  France  is  dis 
posed  to  come  into  these  views,  if  it  is  in  fact  yielding  to  them, 
it  is  certainly  not  anxious  to  let  it  be  known.  But  if  in  the 
end  it  does  adopt  this  English  doctrine,  it  will  only  thereby  fur 
nish  one  more  experiment  towards  the  solution  of  this  great 
question.  In  the  actual  state  of  things,  can  two  great  manu 
facturing  nations,  one  of  which  has  decidedly  the  advantage  of 
the  other  as  to  the  cost  of  production  and  in  the  extent  of  its 
external  market,  freely  compete  with  each  other  in  their  respec 
tive  home  markets  ?  And  what  must  be  the  results  of  such  a 
competition  ? 

In  Germany  these  questions  have  become,  in  consequence  of 
the  Zollverein  or  Customs-Union,  national  and  practical  ques 
tions.  Whilst  in  France  wine  is  the  attraction  which  tempts 
England  to  seek  a  commercial  treaty,  in  Germany  wheat  and 
timber  furnish  the  temptation.  Here,  however,  all  is  still  hy 
pothesis,  for  it  cannot  actually  be  ascertained  whether  the 
too  selfish  tories  of  England  can  ever  be  induced  to  make 
such  concessions  as  will  enable  their  own  government  to  effect 
an  arrangement  with  the  German  Customs-Union  securing 
the  admission  into  Great  Britain  of  corn  and  timber  from 
Germany.  The  Germans  are,  however,  sufficiently  advanced  in 
commercial  matters  to  regard  as  ridiculous,  if  not  impertinent, 
the  supposition  that  they  would  be  satisfied  with  illusions  and 


68  INTKODUCTION. 

hopes  in  the  place  of  gold  and  silver  money.  Should  such 
concessions  he  made  by  the  British  Parliament,  very  serious 
questions  of  commercial  policy  would  become  immediately  in 
Germany  matter  of  public  discussion.  The  last  report  of  Dr. 
Bowring  *  has  given  us  a  foretaste  of  the  tactics  which  England 
would  adopt  in  such  a  case.  England  will  not  regard  the  admis 
sion  of  German  corn  and  timber  as  an  equivalent  for  the 
exorbitant  advantages  which  her  manufactured  products  now 
'enjoy  in  the  German  markets ;  nor  as  a  means  of  preventing 
Germany  from  learning  by  degrees  to  spin  her  own  cotton,  and 
to  import  it  directly  for  that  purpose  from  cotton-growing 
countries,  exchanging  for  it  the  products  of  her  own  manufac 
tures  ;  nor  as  a  method  of  reforming  the  enormous  disproportion 
existing  between  the  importations  and  exportations  of  both 
countries.  By  no  means !  England  regards  the  export  to 
Germany  of  cotton-yarn  as  an  acquired  privilege  ;  she  will  claim 
a  new  equivalent  for  her  concessions,  nothing  less  than  the 
sacrifice  of  the  German  manufactures  of  cotton,  wool,  &c. 
England  will  offer  for  admission  of  German  corn  and  timber 
into  her  markets  a  mess  of  pottage,  as  a  price,  not  merely  for  the 
renunciation  of  the  birth-right  of  the  infant  German  industry, 
but  as  a  price  for  strangling  it  in  the  cradle.  If  Dr.  Bowring 
was  not  deceived  during  his  stay  in  Germany,  if,  as  we  strongly 
surmise,  he  has  not  taken  too  much  in  earnest  the  Prussian 
courtesy  which  was  lavished  upon  him,  the  people  in  those 
regions,  where  the  policy  of  the  German  Customs-Union  is 
elaborated,  are  still  in  the  tracks  of  the  cosmopolitan  theory. 
There  is,  for  instance,  no  distinction  made  between  the  exporta- 

X  tion    of  manufactured    and    of    agricultural    products;    they 

believe  they  are  promoting  national  interests  by  developing  the 

latter  at  the  expense  of  the  former ;  they  have  not  yet  compre- 

/  hended  -the  principle  of  the  industrial  training  or  education  of 

*  the  country  as  a  basis  for  the  regulation  of  duties ;  they  scruple 
not  to  sacrifice  to  foreign  competition  manufactures,  which,  after 
enjoying  protection  for  several  years,  and  flourishing  sufficiently 

*  The  reader  will  find  in  the  second  Chapter  of  the  Fourth  Book  an 
explanation  of  the  allusions  to  Dr.  Bowring. 


INTRODUCTION.  69 

to  beget  internal  competition  and  a  consequent  large  reduction 
of  prices,  they  suffer  to  be  destroyed,  and  with  them  the  spirit  of 
enterprise  in  Germany,  in  its  germ.  Every  manufacture  ruined 
by  the  reduction  or  withdrawal  of  protection,  and  especially  by 
a  governmental  measure,  is  a  dead  body  so  exposed  as  to  injure 
every  living  industry  of  the  same  kind.  We  cannot  shut  our 
eyes  to  such  facts,  let  us  give  them  rather  our  earnest  atten 
tion;  it  is  an  evil  that  they  have  been,  that  they  could 
be  made  public ;  for  by  shaking  confidence  in  the  permanence 
of  needful  protection,  no  light  blow  has  fallen  upon  the  indus 
trial  energy  of  the  country.  We  are  thus  shown  in  what  mode 
German  manufactures  may  receive  the  deadly  poison  in  such 
manner  as  not  to  reveal  too  distinctly  the  cause  of  their  destruc 
tion.  This  is  a  sure  method  of  attacking  industry  in  the  very 
sources  of  its  life.  Under  this  mode  of  attack,  duties  by  weight 
(specific)  would  give  place  to  duties  ad  valorem,  which  opens  the 
door  to  English  smuggling,  and  to  frauds  in  the  valuation  of  k 
articles  of  general  consumption  having  the  least  relative  value 
and  the  greatest  total  bulk,  being  the  very  articles  which  form 
the  basis  of  manufacturing  industry. 

The  practical  importance  of  the  great  question  of  free  trade 
between  nations  is  generally  felt  in  our  day,  as  also  the  necessity 
of  investigating,  with  impartiality,  once  for  all,  how  far  theory 
and  practice  have  erred  on  this  subject,  and  how  far  any  recon 
ciliation  between  them  is  possible.  It  is  at  least  needful  to 
discuss  seriously  the  problem  of  such  a  reconciliation. 

It  is  not  indeed  with  any  assumed  modesty,  it  is  with  the 
feeling  of  a  profound  mistrust  of  his  power,  that  the  author 
ventures  upon  this  attempt ;  it  is  after  resisting  many  years  his 
inclination,  after  having  hundreds  of  times  questioned  the 
correctness  of  opinions  and  again  and  again  verifying  them ; 
after  having  frequently  examined  opposing  opinions,  and  ascer 
tained,  beyond  a  doubt,  their  inaccuracy,  that  he  determined  to 
enter  upon  the  solution  of  this  problem.  He  believes  himself 
free  from  the  empty  ambition  of  contradicting  old  authorities 
and  propounding  new  theories.  If  the  author  had  been  an 
Englishman,  he  would  probably  never  have  entertained  doubts 


70  INTRODUCTION. 

of  the  fundamental  principle  of  Adam  Smith's  theory.  It  was 
the  condition  of  his  own  country  which  begot  in  him,  more  than 
twenty  years  since,  the  first  doubts  of  the  infallibility  of  that 
theory ;  it  was  the  condition  of  his  country  which,  since  that 
time,  determined  him  to  develop,  first  in  anonymous  arti 
cles,  then  in  more  elaborate  treatises,  not  anonymous,  contrary 
opinions.  At  this  moment,  the  interests  of  Germany  alone 
give  him  the  courage  to  publish  the  present  work;  he  will 
however  not  dissemble,  that  a  personal  motive  is  connected  with 
those  interests ;  that  is,  the  necessity  in  which  he  is  placed  of 
showing  by  a  treatise  of  some  extent,  that  he  is  not  quite 
incompetent  to  treat  of  political  economy. 

The  author  will  begin,  as  theory  does  not  begin,  by  interro 
gating  History,  and  deducing  from  it  his  fundamental  principles  ; 
this  being  done,  an  examination  of  former  systems  will  follow, 
and  his  tendency  being  especially  practical,  he  will,  in  conclu 
sion,  furnish  a  sketch  of  the  later  phases  of  commercial  policy. 

For  greater  clearness,  we  give  here  a  cursory  view  of  the 
principal  results  of  his  researches  and  meditations : 

The  association  of  individuals  for  the  prosecution  of  a  common 
end,  is  the  most  efficacious  mode  towards  ensuring  the  happiness 
of  individuals.  Alone,  and  separated  from  his  fellow-creatures, 
man  is  feeble  and  destitute.  The  greater  the  number  of  those 
who  are  united,  the  more  perfect  is  the  association,  and  the 
greater  and  the  more  perfect  is  the  result,  which  is  the  moral 
and  material  welfare  of  individuals. 

The  highest  association  of  individuals  now  realized,  is  that  of 
the  state,  the  nation ;  and  the  highest  imaginable,  is  that  of  the 
whole  human  race.  Just  as  the  individual  is  happier  in  the 
bosom  of  the  state  than  in  solitude,  all  nations  would  be  more 
prosperous  if  they  were  united  together,  by  law,  by  perpetual 
peace,  and  by  free  interchange. 

Nature  leads  nations  gradually  to  the  highest  degree  of  as 
sociation  ;  inviting  them  to  commerce  by  variety  of  climate,  soil, 
and  productions;  and  by  overflowing  population,  by  super 
abundance  of  capital  and  talents,  it  leads  them  to  emigration 
and  the  founding  of  distant  colonies.  International  trade,  by 


INTRODUCTION.  71 

rousing  activity  and  energy,  by  the  new  wants  it  creates,  by  the 
propagation  among  nations  of  new  ideas  and  discoveries,  and  by 
the  diffusion  of  power,  is  one  of  the  mightiest  instruments  of 
civilization,  and  one  of  the  most  powerful  agencies  in  promoting 
national  prosperity. 

The  association  of  nations,  by  means  of  trade,  is  even  yet  very 
imperfect,  for  it  is  interrupted,  or  at  least  weakened  by  war  or 
selfish  measures  on  the  part  sometimes  of  one  and  sometimes  of 
another  nation. 

A  nation  may  by  war  be  deprived  of  its  independence,  its 
wealth,  its  liberty,  its  constitution,  its  laws,  of  its  own  special 
features,  of  that  degree  of  culture  and  national  well-being  to  which 
it  may  have  attained ;  it  may  be  wholly  enslaved.  Nations  are 
thus  the  victims  of  each  other,  and  selfish  policy  is  continually 
disturbing  and  delaying  the  economical  development  of  nations. 

To  preserve,  to  develop,  and  to  improve  itself  as  a  nation  is 
consequently,  at  present,  and  ever  must  be,  the  principal  object 
of  a  nation's  efforts.  There  is  in  that  nothing  false  or  selfish ; 
it  is  a  reasonable  tendency,  agreeing  perfectly  with  the  real 
interests  of  humanity ;  for  it  leads  naturally  to  universal  asso- 
ciation,  which  is  an  advantage  to  men,  so  far  as  nations  have 
reached  the  same  degree  of  culture  and  power,  and,  consequently, 
so  far  as  it  may  be  realized,  by  way  of  association  or  confedera 
tion. 

A  universal  association,  proceeding  from  the  overbearing 
influence  and  wealth  of  a  single  nation,  based,  consequently,  upon 
the  subjection  and  dependence  of  all  others,  would  result  in  the 
annihilation  of  separate  nationalities,  and  national  emulation ;  it 
would  hurt  the  interests  and  wound  the  feelings  of  nations  which 
deem  themselves  on  the  way  to  independence  and  the  attainment 
of  great  wealth,  as  well  as  of  high  political  importance ;  such  an 
association  would  be  only  a  repetition  of  what  has  already  oc 
curred  in  the  attempt  to  subjugate  the  world,  made  by  the 
Romans  ;  an  attempt  that  would  be  more  successful  in  our  days, 
by  means  of  manufactures  and  commerce,  instead  of,  as  formerly, 
by  the  sword ;  though  either  mode  would  restore  the  world  to 
barbarism. 


72  INTRODUCTION. 

The  civilization,  political  education  and  power  of  nations, 
^  depend  chiefly  on  their  economical  condition  and  reciprocally ; 
the  more  advanced  their  economy,  the  more  civilized  and  pow 
erful  will  be  the  nation,  the  more  rapidly  will  its  civilization  and 
power  increase,  and  the  more  will  its  economical  culture  be 
developed. 

In  the  economical  development  of  nations,  it  is  necessary  to 
distinguish  the  following  principal  stages :  the  savage  state,  the 
i/  pastoral  state,  the  agricultural  state,  the  agricultural  and 
manufacturing  state,  and  finally,  the  agricultural,  manufac 
turing,  and  commercial  state. 

It  is  obvious  that  a  nation  possessing  an  extensive  territory, 
enriched  with  varied  resources  and  a  numerous  population, 
uniting  agriculture  and  manufactures  with  an  external  and 
internal  trade,  is  beyond  comparison  more  civilized,  politically 
more  developed  and  more  powerful  than  any  merely  agricultural 
country.  But  manufactures  constitute  the  basis  of  external  and 
\J  internal  trade,  of  navigation,  of  an  improved  agriculture,  con 
sequently  of  civilization  and  political  power ;  and  should  any 
« nation  succeed  in  monopolizing  all  the  manufacturing  activity 
of  the  world,  and  in  checking  all  other  nations  in  their 
economical  development  by  reducing  them  to  the  mere  produc 
tion  of  agricultural  commodities  and  raw  materials,  and  other 
indispensable  local  productions,  it  would  undoubtedly  attain  to 
very  wide,  if  not  to  universal  dominion. 

A  nation  that  greatly  values  its  independence  and  its  safety, 
must  make  a  vigorous  effort  to  elevate  itself  as  fast  as  possible, 
from  an  inferior  to  a  higher  state  of  civilization,  uniting  and 
perfecting  as  quickly  as  possible,  its  own  agriculture,  manufac 
tures,  navigation,  and  commerce. 

The  transition  from  the  savage  to  the  pastoral,  and  from  the 
pastoral  to  the  agricultural  state,  as  well  as  the  first  progress 
in  agriculture,  is  very  efficiently  promoted  by  free  intercourse 
among  manufacturing  and  commercial  nations. 

The  elevation  of  an  agricultural  people  to  the  condition  of 
countries  at  once  agricultural,  manufacturing,  and  commercial, 
can  only  be  accomplished  under  the  law  of  free  trade,  when  the 


INTRODUCTION.  73 

various  nations  engaged  at  the  time  in  manufacturing  industry 
shall  be  in  the  same  degree  of  progress  and  civilization ;  when 
they  shall  place  no  obstacle  in  the  way  of  the  economical 
development  of  each  other,  and  not  impede  their  respective 
progress  by  war  or  adverse  commercial  legislation. 

But  some  of  them,  favored  by  circumstances,  having  dis 
tanced  others  in  manufactures,  commerce,  and  navigation,  and 
having  early  perceived  that  this  advanced  state  was  the  surest 
mode  of  acquiring  and  keeping  political  supremacy,  have  adopted 
and  still  persevere  in  a  policy  so  well  adapted  to  give  them  the 
monopoly  of  manufactures,  of  industry  and  of  commerce,  and 
to  impede  the  progress  of  less  advanced  nations  or  those  in  a 
lower  degree  of  culture.  The  measures  enforced  by  such  nations, 
taken  as  a  whole,  the  prohibitions,  the  duties  on  imports,  the 
maritime  restrictions,  premiums  upon  exports,  &c.,  are  called  the 
protective  system. 

The  anterior  progress  of  certain  nations,  foreign  commercial 
legislation  and  war  have  compelled  inferior  countries  to  look  for 
special  means  of  effecting  their  transition  from  the  agricultural 
to  the  manufacturing  stage  of  industry,  and  as  far  as  practi 
cable,  by  a  system  of  duties,  to  restrain  their  trade  with  more 
advanced  nations  aiming  at  manufacturing  monopoly. 

The  system  of  import  duties  is  consequently  not,  as  has  been 
said,  an  invention  of  speculative  minds ;  it  is  a  natural  conse 
quence  of  the  tendency  of  nations  to  seek  for  guarantees  of  « 
their  existence  and  prosperity,  and  to  establish  and  increase 
their  weight  in  the  scale  of  national  influence. 

Such  a  tendency  is  legitimate  and  reasonable  only  so  far  as  it 
renders  easy,  instead  of  retarding,  the  economical  development 
of  a  nation ;  and  it  is  not  in  opposition  to  the  higher  objects  of 
society,  the  universal  confederation  of  the  future. 

As  human  association  ought  to  be  considered  under  two  points 
of  view,  that  is  to  say,  the  cosmopolitan,  embracing   all   the 
human  race,  and  the  political  or  merely  national,  every  economy,  \ 
private  or  public,  ought  to  be  considered  under  two  different  . 
aspects,  the  individual,  social  and  material  power,  by  means  of 


74  INTRODUCTION. 

which  riches  are  produced,  and  the  interchangeable  value  of  the 
products  of  industry. 

,  There  is,  consequently,  a  cosmopolitan  economy  and  a  political 
economy,  a  theory  of  interchangeable  value,  and  a  theory  of  pro 
ductive  power.  These  doctrines  are  distinct  in  their  essence, 
and  require  to  be  developed  separately. 

The  productive  power  of  nations  is  not  solely  dependent  on  the 
/  labor,  the  saving,  the  morality,  and  the  intelligence  of  individuals, 
or  on  the  possession  of  natural  advantage  and  material  capital ;  it 
is  dependent  also  upon  institutions  and  laws,  social,  political, 
and  civil,  but,  above  all,  on  the  securities  of  their  duration,  their 
independence,  and  their  power  as  nations.  Individuals  would 
be  in  vain  laborious,  economical,  ingenious,  enterprising,  intelli 
gent,  and  moral,  without  a  national  unity,  without  a  division 
of  labor  and  a  co-operation  of  productive  power.  A  nation 
cannot  otherwise  attain  to  a  high  degree  of  prosperity  and 
ypower,  nor  maintain  itself  in  the  permanent  possession  of  its 
intellectual,  social,  and  material  riches. 

The  principle  of  the  division  of  labor  has  been  hitherto  but 
imperfectly  understood.     Industrial  production  depends  much 
.     less  on  the  apportioning  of  the  various  operations  of  a  manufac 
ture  among  several  individuals,  than  on  the  moral  and  material 
association  of  those  individuals  for  a  common  end. 

This  principle  applies  not  only  to  a  manufacture  or  to  a  rural 
industry;  it  extends  also  to  every  kind  of  national  industry, 
agricultural,  manufacturing,  and  commercial. 

The  division  of  labor  and  the  combination  of  productive  power 
take  place  in  a  nation  when  the  intellectual  power  is  applied  so 
as  to  co-operate  freely  and  efficiently  with  national  production, 
when  manufacturing  industry  and  trade  are  equally  and  har 
moniously  developed. 

A  merely  agricultural  people  in  free  intercourse  with  manu 
facturing  and  trading  nations,  will  lose  a  considerable  part  of 
their  productive  power  and  natural  resources,  which  must  remain 
,,  idle  and  unemployed.  Its  intellectual  and  political  culture,  and 
its  means  of  defence,  will  thus  be  limited.  It  can  possess  neither 
an,  important  navigation,  nor  an  extensive  trade ;  its  prosperity, 


INTRODUCTION.  75 

as  far  as  it  results  from  external  commerce,  may  be  interrupted, 
disturbed,  or  annihilated  by  foreign  legislation  or  by  war. 

On  the  other  hand,  manufacturing  industry  is  favorable  to 
science,  art,  and  political  progress  ;  it  promotes  the  general  wel 
fare,  increases  population,  public  revenue,  and  the  power 
of  the  country ;  it  enables  the  latter  to  extend  its  influence  to 
all  parts  of  the  world,  and  to  found  colonies  ;  it  sustains  fisheries 
and  navies,  mercantile  and  national.  By  it  only,  can  agricul 
ture  rise  to  any  high  degree  of  efficiency  and  perfection. 

Agriculture  and  manufacturing  industry  united  in  the  same 
nation,  under  the  same  political  power,  live  in  perpetual  peace ; 
they  are  disturbed  in  their  reciprocal  action,  neither  by  war, 
nor  by  foreign  legislation  ;  they  ensure  to  a  nation  the  continued 
development  of  its  prosperity,  civilization,  and  power. 

Agriculture  and  manufacturing  industry  are  subjected  by 
nature  to  special  conditions. 

The  countries  of  the  temperate  zone  are  especially  fit  for 
the  development  of  manufacturing  industry ;  for  the  temperate 
zone  is  the  region  of  intellectual  and  physical  effort. 

If  the  countries  of  the  torrid  zone  are  little  favored  in  refer 
ence  to  manufactures,  they  possess,  on  the  other  hand,  the 
natural  monopoly  of  many  precious  commodities  which  the  in 
habitants  of  the  temperate  climates  greatly  prize.  The  exchange 
of  the  manufactured  products  of  the  one  for  the  commodities  of 
the  other,  constitutes  a  division  of  labor  and  a  co-operation  of 
productive  power  throughout  the  chief  commercial  nations,  and 
mainly  constitutes  the  great  international  trade  of  the  world. 

A  country  of  the  torrid  zone  would  make  a  very  fatal  mistake, 
should  it  try  to  become  a  manufacturing  country.  Having 
received  no  invitation  to  that  vocation  from  nature,  it  will 
progress  more  rapidly  in  riches  and  civilization  if  it  continues 
to  exchange  its  agricultural  productions  for  the  manufactured 
products  of  the  temperate  zone. 

It  is  true  that  tropical  countries  sink  thus  into  dependence 
upon  those  of  the  temperate  zone,  but  that  dependence  will  not 
be  without  compensation,  if  competition  arises  among  the  nations 
of  temperate  climes  in  their  manufacturing  industry  in  their 


76  INTRODUCTION. 

trade  with  the  former,  and  in  their  exercise  of  political  power. 
This  competition  will  not  only  ensure  a  full  supply  of  manufac 
tures  at  low  prices,  but  will  prevent  any  one  nation  from  taking 
v  advantage  by  its  superiority  over  the  weaker  nations  of  the 
torrid  zone.  There  would  be  danger  and  damage  in  this  de 
pendence  only  so  far  as  manufactures,  important  branches  of 
/  trade,-  foreign  commerce,  and  maritime  power  should  become  the 
monopoly  of  a  single  nation. 

Nations  of  the  temperate  zone  possessing  extensive  territory 
enriched  with  varied  resources,  have  lost  one  of  the  richest 
sources  of  prosperity,  civilization  and  power,  if  they  do  not 
succeed  in  realizing  a  national  division  of  labor  and  a  co-ope 
ration  of  national  productive  power,  as  soon  as  they  possess 
the  necessary  conditions,  economical,  intellectual,  and  social, 
for  accomplishing  it. 

By  economical  conditions,  we  understand  an  advanced  stage 
of  agriculture,  which  cannot  be  sensibly  stimulated  by  the  export 
of  its  products;  by  moral  conditions,  a  high  moral  culture 
among  individuals ;  by  social  conditions,  we  mean  legal  security 
to  citizens  for  their  persons  and  properties,  and  the  free  exercise 
of  their  moral  and  physical  faculties ;  institutions  regulating 
and  facilitating  trade,  and  suppressing  all  restraints  upon 
industry,  liberty,  intelligence,  and  morality,  as  for  instance, 
feudal  institutions. 

It  is  of  the  utmost  concern  for  a  nation  uniting  such  advan 
tages,  first  fully  to  supply  its  own  wants,  its  own  consumption, 
with  the  products  of  its  own  manufactures,  then  to  form  direct 
connections  progressively  with  the  countries  of  the  torrid  zone, 
transmitting  to  them,  upon  its  own  vessels,  its  manufactured 
products,  receiving  in  exchange  their  commodities. 

In  comparison  with  this  exchange  of  the  manufactured  pro 
ducts  of  the  temperate,  for  the  agricultural  productions  of  the 
torrid  zone,  other  international  trade  is  of  a  secondary  import 
ance,  if  we  but  except  the  trade  in  a  few  special  articles ;  wine, 
for  instance. 

The  production  of  raw  materials  and  commodities  among  the 
great  nations  of  temperate  climes,  has  no  real  importance  but  in 


INTRODUCTION.  77 

regard  to  internal  trade.  An  uncultivated  nation  may  at  the 
beginning  advance  its  agriculture  by  the  exportation  of  wheat, 
wine,  flax,  hemp,  and  wool ;  but  no  great  nation  ever  arrived  at 
wealth,  civilization,  and  power,  by  such  polic^f*-*—- -^^^ 

It  may  be  stated  as  a  principle,  that  a  nat&ri  is  ri§fe£r  and 
more  powerful,  in  proportion  as  it  exports  j^te^gtanu&^red  ^ 
products,  imports    more   raw  materials,    and   spiifeUptes "  inore 
tropical  commodities.  "'v^-r':;./^ » 

Productions  of  the  tropics  serve  to  manufacturing  countries 
of  temperate  climes,  not  only  as  raw  materials  ancT  alimentary 
commodities,  but  also,  and  especially,  as  stimulants  for  agricul 
tural  and  industrial  labor.  The  nation  which  consumes  the 
greatest  quantity  of  tropical  commodities,  will  always  be  that 
of  which  the  agricultural  and  manufacturing  production  is  rela 
tively  the  most  considerable,  and  that  which  consumes  the 
greatest  quantity  of  its  own  products. 

In  the  economical  development  of  nations  by  means  of  external 
trade,  four  periods  must  be  distinguished.     In  the  first,  agricul 
ture  is  encouraged  by  the  importation  of  manufactured  articles,  „ 
and  by  the  exportation  of  its  own  products ;   in  the  second, 
manufactures  begin  to  increase  at  home,  whilst  the  importation  * 
of  foreign  manufactures  to  some  extent  continues ;  in  the  third, 
home  manufactures  mainly  supply  domestic   consumption   and 
the  internal  markets ;  finally,  in  the  fourth,  we  see  the  exporta 
tion   upon  a  large   scale  of  manufactured   products,  and   the 
importation  of  raw  materials  and  agricultural  products. 

The  system  of  import  duties  being  considered  as  a  mode  of 
assisting  the  economical  development  of  a  nation,  by  regulating 
its  external  trade,  must  constantly  take  as  a  rule  the  principle 
of  the  industrial  education  of  the  country. 

To  encourage  agriculture  by  the  aid  of  protective  duties  is 
vicious  policy ;  for  agriculture  can  be  encouraged  only  by  pro 
moting   manufacturing   industry;    and   the   exclusion   of    rawy 
materials  and  agricultural  products  from  abroad,  has  no  other 
result  than  to  impede  the  rise  of  national  manufactures. 

The  economical  education  of  a  country  of  inferior  intelligence 
and  culture,  or  one  thinly  populated,  relatively  to  the  extent 


78  INTRODUCTION. 

and  the  fertility  of  its  territory,  is  effected  most  certainly  by 
free  trade,  with  more  advanced,  richer,  and  more  industrious 
nations.  Every  commercial  restriction  in  such  a  country  aim 
ing  at  the  increase  of  manufactures,  is  premature,  and  will  prove 
detrimental,  not  only  to  civilization  in  general,  but  the  progress 
of  the  nation  in  particular.  If  its  intellectual,  political,  and 
economical  education,  under  the  operation  of  free  trade,  has 
advanced  so  far,  that  the  importation  of  foreign  manufactures, 
and  the  want  of  markets  for  its  own  products  has  become  an 
obstacle  to  its  ulterior  development,  then  only  can  protective 
measures  be  justified. 

A  nation  without  extensive  territory  and  of  otherwise  limited 
resources,  which  does  not  control  the  mouths  of  its  rivers,  or 
which  has  not  suitable  boundaries,  cannot  resort  to  the  protective 
system,  or  at  least  cannot  employ  it  with  full  success.  It  must 
be  first  enlarged  by  way  of  conquest  or  negotiation. 

Manufacturing  industry  is  concerned  with  so  many  branches 

of  science  and  art,  it  implies  so  much  experience,  practice,  and 

adaptation,  that  the  industrial  training  and  education  of  a  country 

can  proceed  but  slowly.     All  excessive  or  premature  protection 

*  is  expiated  by  a  diminution  of  national  prosperity. 

No  commercial  policy  is  more  dangerous  and  reprehensible 
than  a  sudden  resort  to  absolute  prohibition  of  foreign  products. 
It  may,  however,  be  justified,  when  a  country,  separated  from 
others  by  a  long  war,  finds  itself  almost  in  a  compulsory  state 
of  prohibitions  in  regard  to  foreign  products,  and  under  the 
absolute  necessity  of  offering  a  high  premium  to  the  industry 
which  will  enable  it  to  supply  its  own  wants. 

The  return  from  such  a  condition  must  be  by  gradual  transi 
tion  from  the  prohibitive  to  the  protective  system,  and  should 
be  effected  by  means  of  duties  fixed  by  anticipation,  and  de 
creasing  gradually.  On  the  other  hand,  a  nation  which  is  to 
f  pass  from  free  trade  to  the  protective  system  should  commence 
with  low  duties  to  be  afterwards  raised  by  degrees  according  to 
a  suitable  scale. 

Duties  thus  fixed  by  anticipation  must  be  strictly  maintained 
by  the  government;  it  must  be  careful  not  to  diminish  them 


INTRODUCTION.  79 

before  the  appointed  time,  and  equally  careful  to  raise  them  if 
they  should  prove  insufficient. 

Duties  upon  imports  so  high  as  absolutely  to  exclude  foreign  > 
competition  are  prejudicial  to  the  country  which  adopts  them ;  * 
for   they  suppress   all  rivalry  between   domestic   and   foreign 
manufacturers,  and  encourage  indolence  among  the  former. 

When,  under  the  rule  of  suitable  and  progressive  duties,  the 
manufactures  of  a  country  do  not  thrive,  it  is  an  evidence  that 
the  country  does  not  yet  possess  the  conditions  requisite  to  a 
manufacturing  people. 

Duties  designed  to  favor  an  industry  should  never  be  put  so 
low  as  to  endanger  the  existence  of  the  latter  from  foreign  com 
petition.  It  should  be  a  rule  to  preserve  what  exists — to  protect 
national  industry  in  its  trunk  and  in  its  roots. 

Foreign  competition  should  not  have  more  than  its  share  in 
the  annual  increase  of  consumption.  Duties  should  be  raised 
when  foreign  commodities  supply  the  greatest  part  or  the  whole 
of  the  increased  annual  consumption. 

A  country  like  England,  which  is  far  in  advance  of  all  its  • 
competitors,  cannot   better   maintain  and  extend  its  manufac 
turing   and  commercial   industry  than   by  a   trade  as  free  as 
possible  from  all  restraints.    For  such  a  country,  the  cosmopoli 
tan  and  the  national  principle  are  one  and  the  same  thing. 

This   explains   the   favor  with  which   the   most  enlightened 
economists  of  England  regard  free  trade,  and  the  reluctance  of  * 
the  wise  and  prudent  of  other  countries  to  adopt  this  principle 
in  the  actual  state  of  the  world. 

A  quarter  of  a  century  since,  the  prohibitive  and  protective 
system  of  England  operated  to  her  detriment  and  to  the  advan-  * 
tage  of  her  rivals. 

Nothing   could   be   more   prejudicial   to   England   than  her  m 
restrictions  upon  the  importation  of  raw  material  and  food. 

Union  of  customs  and  commercial  treaties  are  the  most  effi 
cient  means  of  facilitating  national  exchanges. 

But  treaties  of  commerce  are  legitimate  and  durable  only  when 
the  advantages  are  reciprocal.  They  are  fatal  and  illegitimate 
when  they  sacrifice  one  country  to  another  ;  when  one  country, 


80  INTRODUCTION. 

to  purchase  advantage  for  its  agriculture,  sacrifices  a  manu 
facturing  industry  already  well  advanced;  such  a  treaty  was 
that  of  Methuen,  a  compact  in  which  one  party  took  the  lion's 
share. 

The  treaty  concluded  between  England  and  France  in  1786 
was  one  of  those  leonine  treaties.  And  all  the  propositions 
made  since  by  England  and  France  to  other  countries  are  of  the 
same  nature. 

If  protective  duties  enhance  for  a  time  the  price  of  domestic 
manufactures,  they  secure  afterwards  lower  prices  by  means 
of  internal  competition;  for  an  industry  that  has  reached  its 
full  development  can  safely  reduce  its  prices  far  below  those 
which  were  necessary  to  ensure  its  growth,  and  thus  save  to  its 
consumers  the  whole  expense  of  transportation  and  the  whole 
profits  of  trade,  which  are  consequent  upon  imports  of  the  same 
articles  from  other  countries. 

The  loss  occasioned  by  protective  duties  consists,  after  all, 
only  in  values ;  whilst  the  country  thus  acquires  a  power,  by  which 
it  is  enabled  to  produce  a  great  mass  of  values.  This  loss  in 
values  must  be  considered  as  the  price  of  the  industrial  training 
of  the  country. 

Protective  duties  upon  manufactured  products  do  not  press 
heavily  upon  the  agriculture  of  a  country.  By  the  development 
of  manufacturing  industry,  the  wealth,  population,  consumption 
of  agricultural  products,  rent,  and  exchangeable  value  of  real 
estate  are  vastly  increased,  whilst  the  manufactured  products 
consumed  by  farmers  gradually  fall  in  price.  The  gain,  thus 
realized,  exceeds,  in  the  proportion  of  ten  to  one,  the  loss  which 
agriculturalists  incur  by  the  transient  rise  of  manufactured 
products. 

Internal  and  external  trade  flourish  alike  under  the  pro 
tective  system ;  these  have  no  importance  but  among  nations 
supplying  their  own  wants  by  their  own  manufacturing  industry, 
consuming  their  own  agricultural  products,  and  purchasing 
foreign  raw  materials  and  commodities  with  the  surplus  of  their 
manufactured  articles.  Home  and  foreign  trade  are  both  insig 
nificant  in  the  merely  agricultural  countries  of  temperate  climes, 


INTRODUCTION.  81 

and  their  external  commerce   is  usually  in  the  hands  of  the 
manufacturing  and  trading  nations  in  communication  with  them. 

A  good  system  of  protection  does  not  imply  any  monopoly  in 
the  manufacturers  of  a  country ;  it  only  furnishes  a  guarantee 
against  losses  to  those  who  devote  their  capital,  their  talents, 
and  their  exertions  to  new  branches  of  industry. 

There  is  no  monopoly,  because  internal  competition  comes  in 
the  place  of  foreign  competition,  and  every  individual  has  the 
privilege  of  taking  his  share  in  the  advantages  offered  by  the 
country  to  its  citizens ;  it  is  only  an  advantage  to  citizens  as 
against  foreigners,  who  enjoy  in  their  own  country  a  similar 
advantage. 

But  this  protection  is  useful  not  only  because  it  awakens  the 
sleeping  energies  of  a  country  and  puts  in  motion  its  productive 
power,  but  because  it  attracts  the  productive  power  of  foreign 
countries,  including  capital,  both  material  and  moral,  and  skilful 
masters  as  well  as  skilful  men. 

On  the  other  hand,  the  absence  of  manufacturing  industry 
in  a  nation  long  civilized,  the  productive  powers  of  which  cannot 
be  sensibly  excited  by  the  export  of  raw  materials  and  agricul 
tural  products,  and,  by  the  importation  of  foreign  manufactures, 
exposes  it  to  numerous  and  serious  inconveniences. 

The  agriculture  of  such  a  country  must  necessarily  suffer  ;  for 
the  surplus  population,  which,  in  a  great  manufacturing  develop 
ment,  finds  means  of  living  in  factories  and  creates  a  large 
demand  for  agricultural  products,  thus  affording  substantial 
profits  to  agriculture,  will  be  reduced  to  the  labor  of  the  fields, 
and  thence  will  follow  a  subdivision  of  farms  and  a  small  culture, 
both  as  prejudicial  to  the  power  and  the  civilization  of  a  country 
as  to  its  wealth. 

An  agricultural  people  consisting   chiefly  of  proprietors  of 
small  estates,  can  neither  fill  the  channels  of  internal  trade  with* 
large  quantities  of  commodities,  nor  furnish  a  large  consumption 
for  manufactured  goods ;  in  such  a  country,  every  one  is  limited  • 
almost  to  his  own  production  and  his  own  consumption.     In  cir 
cumstances  like  these,  no  complete  system  of  communications  can  • 
6 


82  INTRODUCTION. 

be  established,  and  the  immense  advantages  which  they  afford 
are  lost  to  the  country. 

Hence  ensues  necessarily,  moral  and  material,  individual  and 
political  weakness.  The  danger  is  aggravated  when  neighbor 
ing  nations  pursue  a  different  policy :  some  making  progress  in 
every  respect,  others  retrograding ;  some  hoping  for  a  brighter 
future,  the  courage  and  enterprise  of  their  people  being  aroused ; 
the  absence  of  hope  extinguishing  by  degrees  in  others  all 
courage,  intelligence,  and  enterprise. 

History  is  not  without  examples  of  entire  nations  having 
perished,  because  they  knew  not  and  seized  not  the  critical 
moment  for  the  solution  of  the  great  problem  of  securing  their 
moral,  economical,  and  political  independence,  by  the  establish 
ment  of  manufacturing  industry,  and  the  formation  of  a  powerful 
class  of  manufacturers  and  tradesmen. 


NATIONAL  SYSTEM 


OP 


POLITICAL    ECONOMY. 
BOOK  L— HISTOET. 

CHAPTER  I. 
ITALY. 

AT  the  revival  of  civilization  in  Europe,  no  country  was  more 
favored  as  to  commerce  and  manufactures  than  Italy.  Barbarism 
had  not  wholly  rooted  up  the  culture  of  ancient  Rome.  A  pro 
pitious  climate  and  a  fertile  soil,  even  with  an  unskilful  agricul 
ture,  furnished  abundant  sustenance  for  a  numerous  population. 
The  more  necessary  arts  and  trades  had  no  more  disappeared 
than  the  old  Roman  municipalities.  A  productive  coast  fishery 
was  a  good  school  for  seamen,  and  the  navigation  of  an  extended 
coast  supplied,  in  a  good  degree,  the  want  of  better  communica 
tions  in  the  interior.  The  vicinity  of  Greece,  Asia  Minor,  and 
Egypt,  and  the  facility  of  communication  by  sea  with  those  coun 
tries,  secured  to  Italy  considerable  advantages  for  the  trade  of 
the  East,  a  trade  which  formerly,  though  upon  a  small  scale, 
had  been  carried  on  through  Russia  and  by  a  northern  route. 
With  these  advantages,  Italy  became  necessarily  conversant  with 
those  arts  and  manufactures  which  Greece  has  saved  from 
ancient  civilization. 

Since  the  emancipation  of  the  Italian  cities  by  Otho  the  Great, 
a  truth,  of  which  history  offers  many  proofs,  had  received  fresh 
confirmation,  that  liberty  and  industry  are  inseparable  com 
panions,  though  it  be  not  rare  that  one  is  born  before  the  other. 

(83) 


84  HISTORY. 

"Where  commerce  and  industry  appear,  we  may  be  sure  that 
liberty  is  not  far  off;  where  liberty  unfurls  her  flag,  it  proves 
a  sure  harbinger  of  industry.  For  it  is  in  the  nature  of 
things,  that  men  who  have  achieved  the  possession  of  material 
and  moral  benefits,  seek  guarantees  for  the  transmission  of  these 
benefits  to  their  posterity ;  so,  after  having  enjoyed  liberty,  they 
exert  themselves  earnestly  to  improve  their  moral  and  material 
condition  as  the  natural  impulse  of  freedom. 

For  the  first  time  since  the  fall  of  the  free  cities  of  antiquity, 
the  Italian  cities  gave  to  the  world  the  spectacle  of  free  and 
rich  communities.  Cities  and  countries  united  their  efforts  for 
mutual  advantage,  and  were  greatly  aided  in  their  labors  by  the 
crusades.  The  transportation  of  the  crusaders  and  their  sup 
plies,  not  only  promoted  navigation,  but  stimulated  the  establish 
ment  of  profitable  commercial  relations  with  the  East,  the  intro 
duction  of  new  manufactures,  new  processes,  new  plans,  and  the 
knowledge  of  new  sources  of  enjoyment.  On  the  other  hand, 
the  oppression  of  the  feudal  system  was  to  some  extent  removed, 
to  the  great  benefit  of  free  agriculture,  and  to  the  marked 
advantage  of  the  cities. 

As  compared  with  Venice  and  Geneva,  Florence  became 
distinguished  especially  for  its  manufactures  and  its  operations 
in  money  and  exchange.  From  the  twelfth  and  thirteenth 
centuries  its  manufactures  of  silk  and  woollen  goods  were  flour 
ishing;  the  corporations  which  carried  on  those  industries  had 
their  share  in  the  government;  the  republic  itself  was  formed 
under  their  influence. 

The  woollen  manufacture  employed  no  less  than  200  factories  ; 
80,000  pieces  of  cloth,  the  raw  material  of  which  was  imported 
from  Spain,  were  manufactured  there  every  year.  Common 
cloths  were  also  imported  into  Florence  to  the  annual  value  of 
300,000  gold  florins  from  Spain,  France,  Belgium,  and  Ger 
many,  which,  after  being  dressed  in  her  factories,  were  sent  to  the 
East.  Florence  was  the  banker  of  all  Italy,  there  being  no  less 
than  80-  banks.  The  State  had  a  yearly  income  of  300,000 
golden  florins,  [$5,000,000],  and  was  much  richer  than  the  co- 


ITALY.  85 

temporary  kingdoms  of  Naples  and  Arragon,  and  than  Great 
Britain  and  Ireland  at  the  time  of  Queen  Elizabeth. 

In  the  twelfth  and  thirteenth  centuries,  Italy  possessed  all  the 
elements  of  national  prosperity ;  commerce  and  industry  were 
there  greatly  in  advance  of  all  other  countries.  Her  agri 
culture  and  manufactures  were  models  for  imitation  and  emula 
tion  among  other  nations.  Her  roads  and  canals  were  the  most 
perfect  then  existing  in  Europe.  The  civilized  world  is  indebted 
to  Italy  for  banks,  for  the  compass,  for  improvements  in  naval 
construction,  for  bills  of  exchange,  and  for  a  multitude  of  valu 
able  regulations  and  commercial  laws,  as  well  as  for  innumerable 
municipal  and  political  institutions.  Her  merchant  marine 
and  her  navy  were  by  far  the  most  considerable  in  the  Southern 
Seas.  The  trade  of  the  world  was  in  her  hands ;  for,  except  a 
movement  of  business,  still  unimportant,  in  the  Northern  Seas, 
that  trade  did  not  extend  beyond  the  Mediterranean  and  Black 
Seas.  Italy  supplied  all  other  countries  with  manufactured 
articles  and  superfluities  as  well  as  with  tropical  commodities, 
and  received  from  them  raw  materials.  She  lacked  only  one 
thing  to  be  what  England  has  become  in  our  days,  and  in  default 
of  that  one  thing  all  the  rest  was  lost ;  she  lacked  national  unity, 
and  the  power  which  this  unity  gives. 

The  cities  and  the  lords  of  Italy  did  not  regard  themselves 
as  members  of  one  and  the  same  body ;  they  battled  against  and 
destroyed  one  another  as  if  they  were  independent  powers.  Be 
sides  those  external  contests,  each  commune  was  a  prey  to  intes 
tine  struggles  between  democracy,  aristocracy,  and  monarchy. 
Those  calamitous  wars  were  stimulated,  kept  up,  and  envenomed 
by  the  influence  and  the  invasions  of  foreign  powers,  as  well  as 
by  their  domestic  theocracy  and  its  fulminations,  which  still 
divides  each  city  into  two  hostile  factions. 

Italy  achieved  her  own  ruin ;  the  history  of  her  maritime 
power  furnishes  the  evidence.  From  the  eighth  to  the  eleventh 
century  Amalfi  flourished  in  wealth  and  power.  Her  ships 
swarmed  upon  the  seas,  and  her  money  circulated  almost 
exclusively  in  Italy  and  in  the  East.  The  maritime  code  of 
Amalfi  was  in  very  high  esteem,  and  being  regarded  as  among 


86.  HISTORY. 

the  best  extant,  it  was  adopted  in  all  the  ports  of  the  Mediterra 
nean.  In  the  twelfth  century  this  maritime  power  was  destroyed 
by  Pisa,  which  in  turn  fell  beneath  the  power  of  Genoa,  and 
Genoa,  after  a  severe  struggle,  was  compelled  to  yield  to  Venice. 

The  fall  of  Venice  shows  also  an  indirect  consequence  of 
this  narrow  policy.  It  would  have  been  easy  for  a  league 
of  the  maritime  powers  of  Italy  to  have  maintained  Italian  pre 
ponderance  in  Greece,  in  the  Archipelago,  in  Asia  Minor,  and 
in  Egypt;  nay,  even  to  have  enlarged  and  strengthened  this 
ascendency,  to  have  arrested  the  progress  of  the  Turks  and  their 
piracies,  to  have  disputed  with  the  Portuguese  the  new  route 
to  the  Indies  by  the  Cape  of  Good  Hope.  But  in  the  actual 
circumstances,  Venice  was  reduced  to  her  unaided  strength,  and 
was  paralysed  without,  not  only  by  the  other  Italian  states,  but 
by  the  neighboring  European  powers. 

It  would  not  have  been  difficult  for  a  well-organized  league  of 
the  Italian  continental  powers  to  have  defended  the  indepen 
dence  of  Italy  against  the  greatest  monarchies  of  the  time.  The 
establishment  of  such  a  league  was  attempted  in  1526,  but  in  a 
moment  of  danger,  and  only  for  the  purpose  of  temporary  de 
fence.  The  lukewarmness  and  treason  of  its  members  and  its 
chiefs  resulted  in  the  growth  of  the  Milanese,  and  the  fall  of  the 
Tuscan  republic.  From  that  moment  may  be  dated  the  decline 
of  commerce  and  industry  in  Italy. 

Before,  as  well  as  after  that  time,  Venice  had  aimed  to  be  an 
independent  nation.  So  long  as  she  had  to  do  only  with  the 
fragments  of  Italian  nationality,  or  with  defunct  Greece,  she 
could  maintain,  without  serious  trouble,  her  manufacturing  and 
commercial  supremacy  along  the  shores  of  the  Mediterranean 
and  Black  Seas.  But  when  whole  nations  full  of  vigor, 
appeared  upon  the  political  arena,  it  was  discovered  that  Venice 
was  but  a  city,  and  its  aristocrary  only  a  municipal  aristocracy. 
Venice  had  indeed  subjugated  many  islands  and  vast  provinces, 
but  she  had  always  governed  them  as  conquered  countries,  and 
each  of  her  conquests,  according  to  the  testimony  of  history,  had 
been  a  source  of  weakness  and  not  of  strength. 

The   spirit  to  which  Venice  owed  her  grandeur  was  at  the 


ITALY.  87 

same  time  gradually  extinguished  in  the  heart  of  the  republic. 
Her  power  and  her  prosperity,  the  work  of  a  patriotic  and  brave 
aristocracy,  itself  the  product  of  an  energetic  democracy,  jealous 
of  its  liberty,  endured  and  increased,  so  long  as  this  liberty 
retained  its  democratic  energy,  and  so  long  as  this  energy  was 
directed  by  the  patriotism,  wisdom,  and  heroism  of  the  aristoc 
racy  ;  but  in  proportion  as  the  aristocracy  degenerated  into  a 
despotic  oligarchy,  extinguishing  all  liberty,  all  popular  energy, 
the  roots  of  that  power  and  that  prosperity  dried  up,  though 
the  limbs  and  the  top  of  the  tree  continued  for  a  time  to  flourish. 

"  A  nation  in  a  state  of  servitude,"  says  Montesquieu,  "la 
bors  rather  to  preserve  than  to  acquire.  A  free  nation  labors 
rather  to  acquire  than  to  preserve."  To  this  just  remark 
he  might  have  added :  "  And  whilst  people  think  only  of  pre 
serving,  and  never  of  acquiring,  they  are  overtaken  by  ruin  ;"  for 
a  nation  which  does  not  advance,  retrogrades,  and  must  finally 
perish.  Very  far  from  extending  their  trade  and  making  new 
discoveries,  the  Venetians  had  not  even  the  sagacity  to  take 
advantage  of  the  discoveries  of  the  others.  Excluded  from  the 
trade  of  the  East  by  the  discovery  of  a  new  route,  they  scarce  so 
much  as  admitted,  much  less  admired,  the  discovery.  What  every 
body  saw  they  refused  to  believe.  And  when  they  began  to  sus 
pect  the  fatal  consequences  of  the  change  to  be  accomplished, 
they  tried  to  maintain  the  old  instead  of  taking  their  share  in  the 
benefits  of  the  new  route ;  they  employed  miserable  intrigues  to 
preserve  and  to  acquire  what  they  could  only  obtain  by  enter 
prise  and  courage  applied  to  the  new  circumstances  in  which 
they  were  placed.  And  when,  finally,  they  had  lost  every  thing, 
when  the  riches  of  India  flowed  into  Cadiz  and  Lisbon,  and 
not  into  their  port,  they  betook  themselves,  like  idlers  and 
spendthrifts,  to  alchemy.* 

When  the  republic  of  Venice  was  in  a  condition  of  progress 
and  prosperity,  an  inscription  in  the  Golden  Book  was  considered 
as  a  reward  for  eminent  services  in  commerce,  industry,  govern- 

*  A  vulgar  charlatan,  who  pretended  to  the  art  of  making  gold,  was  re 
ceived  by  the  aristocracy  as  a  Saviour.  Daru,  History  of  Venice,  vol.  iii., 
chap.  xixs 


88  HISTORY. 

ment,  or  in  war ;  this  honor  was  accessible,  upon  these  terms, 
to  foreigners,  the  most  distinguished  of  the  silk  manufacturers, 
who  emigrated  from  Florence,  having  obtained  that  favor.  But 
the  book  was  shut  when  people  began  to  regard  public  distinc 
tions  and  the  public  revenue  as  the  hereditary  patrimony  of  the 
patricians.  Later,  when  the  necessity  of  restoring  an  effete  and 
degenerate  nobility  was  admitted,  the  book  was  again  opened. 
Public  services  were  no  longer  regarded  as  the  principal  titles 
to  an  inscription,  but  wealth  and  ancie'nt  origin.  Under  this 
policy  the  golden  book  fell  into  such  discredit,  that  it  remained 
uselessly  open  for  a  century. 

If  we  should  interrogate  history  as  to  the  causes  of  the  fall 
of  that  republic  and  its  trade,  the  answer  would  be,  that  the 
principal  causes  were  the  folly,  inactivity,  and  want  of  energy 
in  a  degenerate  aristocracy,  the  apathy  of  a  nation  sunk  into 
the  condition  of  servitude.  The  trade  and  the  manufactures  of 
Venice  must  have  perished,  even  if  the  route  by  the  Cape  of 
Good  Hope  had  never  been  discovered. 

The  fall  of  Venice,  as  well  as  that  of  all  the  other  Italian 
republics,  is  also  explained  by  the  want  of  national  unity,  by 
foreign  preponderance,  by  the  pressure  of  the  Romish  Church, 
and  by  the  establishment  in  Europe  of  vast,  powerful,  and 
compact  nationalities. 

If  we  study  specially  the  commercial  policy  of  Venice,  we 
perceive  at  once  that  the  policy  of  modern  manufacturing  and 
commercial  nations  is,  upon  a  large  scale,  or,  in  national  propor 
tions,  little  else  than  the  adoption  of  the  Venetian  policy. 
Maritime  restrictions  and  import  duties  favored  the  ship-owners 
and  manufacturers  of  the  country ;  and  we  find  that  even  then 
the  rule  prevailed  of  importing  raw  materials  and  exporting 
manufactured  products. 

It  has  been  recently  asserted,  in  support  of  the  principle  of 
absolute  free  trade,  that  the  fall  of  Venice  was  caused  by  com 
mercial  restrictions.  This  proposition  contains  a  little  truth 
mingled  with  much  error.  Whoever  studies  without  prejudice 
the  history  of  that  republic,  will  find  that  there,  as  in  greater 
nations,  international  trade — whether  with  or  without  restric- 


ITALY.  89 

tions,  has  proved  advantageous  or  injurious  to  public  power  and 
prosperity,  according  to  the  peculiar  circumstances  of  the  time. 

Unlimited  free  trade  was  the  true  policy  of  the  republic  in 
the  first  period  of  its  elevation,  for  otherwise  how  could  a  hamlet 
of  fishermen  become  a  commercial  emporium  ?  Restrictions 
became  advantageous  to  Venice  after  she  had  attained  a  certain 
degree  of  power  and  wealth ;  for  by  them  she  attained  her 
manufacturing  and  commercial  supremacy.  Restrictions  became 
injurious  after  she  had  reached  this  ascendency;  for  they 
removed  all  rivalry  between  her  citizens  and  those  of  foreign 
countries,  and  thus  destroyed  the  stimulus  to  excellence  and 
industry.  It  was  therefore  not  the  establishment  of  such  restric 
tions,  it  was  rather  persevering  in  them  after  they  had  ceased 
to  be  applicable,  which  was  prejudicial  to  the  Venetians. 

That  proposition  was  false  also  in  this  respect,  that  it  left  out 
of  view  the  great  hereditary  monarchies.  Although  maintaining 
rule  over  provinces  and  island's,  Venice  was  still  but  an  Italian 
city ;  she  had  encountered  in  her  growth  only  other  cities  of 
Italy,  and  her  exclusive  commercial  policy  could  only  extend 
so  long  as  it  remained  unchecked  by  more  powerful  nations. 
When  this  event  began  to  be  realized,  Venice  could  only  pre 
serve  her  supremacy  by  placing  herself  at  the  head  of  the  whole 
of  Italy,  and  extending  her  commercial  policy  over  the  whole 
peninsula.  It  was  not  possible  to  maintain  for  a  very  long 
period  any  system  embracing  the  commercial  supremacy  of  a 
single  city,  however  skilfully  devised,  as  against  all  other  nations. 

The  example  of  Venice,  so  far  as  it  can  be  invoked  against 
the  restrictive  system,  proves  only  this,  neither  more  nor  less, 
that  an  isolated  city  or  a  small  state,  as  against  great  empires, 
cannot  apply  or  maintain  beneficially  that  system,  and  that  a 
power  having  once,  by  the  help  of  restrictions,  attained  manu 
facturing  and  commercial  ascendency,  must  return  to  the 
principle  of  free  trade  as  soon  as  it  becomes  safe  to  do  so. 

We  meet  in  this,  as  in  all  discussions  upon  this  subject  of 
international  free  trade,  a  confusion  of  ideas,  productive  of  grave 
mistakes.  Commercial  liberty  is  spoken  of  in  the  same  terms 
as  religious  and  civil  liberty.  The  friends  and  champions  of 


V 

90  HISTORY. 

liberty  in  general,  regarding  themselves  as  the  defenders  of 
liberty  under  all  its  forms  and  names,  rally  to  the  defence  of 
liberty  of  trade,  making  no  distinction  between  the  liberty  of 
domestic  trade,  and  that  of  international  trade ;  both  of  which,  in 
their  essence  and  in  their  results,  differ  widely  from  each  other. 
For  if  restraints  upon  international  trade  are  but  in  a  very  few 
cases  compatible  with  individual  liberty,  the  highest  degree  of 
individual  liberty  is  not  incompatible  in  foreign  trade  with  heavy 
restrictions.  It  may  even  happen  that  foreign  commerce  wholly 
free  may  lead  to  national  servitude,  as  we  intend  to  show  in  the 
instance  of  Poland. 

It  is  in  this  sense  that  Montesquieu  says :  "  It  is  in  free 
countries  that  men  of  trade  encounter  innumerable  obstacles ; 
they  are  never  less  hampered  by  laws  than  in  countries  not 
free."* 


CHAPTER  II. 
HANSE  TOWNS. 

HAVING  attained  ascendency  in  Italy,  the  genius  of  industry, 
of  commerce,  and  liberty,  passed  the  Alps,  traversed  Germany, 
and  constructed  for  itself  a  new  throne  upon  the  shores  of  the 
Northern  Sea. 

Henry  the  First,  the  father  of  the  liberator  of  Italian  Com 
munes,  had  already  encouraged  the  building  of  new,  and  the 
enlargement  of  existing  cities,  some  of  which  were  built  upon 
the  very  sites  of  Roman  colonies  or  upon  imperial  domains. 

He  and  his  successors,  and  later,  the  Kings  of  France  and 
England,  found  cities  to  be  the  most  effectual  counterpoise  of 
the  aristocracy,  the  most  fertile  source  of  public  revenue,  and 
a  new  means  of  public  defence.  By  commercial  relations 
with  the  cities  of  Italy,  by  emulation  of  Italian  industry  and 

*  Spirit  of  Laws ;  Book  xx.,  chap.  xii. 


HANSE    TOWNS.  91 

free  institutions,  the  German  cities  soon  reached  a  high  degree 
of  prosperity  and  civilization. 

Municipal  life  gave  birth  to  a  spirit  of  progress  in  the  arts, 
and  to  the  desire  of  becoming  distinguished  by  wealth  and 
enterprise  at  the  same  time  that  material  well-being  gave  origin 
to  a  desire  for  political  ameliorations. 

The  maritime  cities  of  Northern  Germany,  strong  as  they 
were  with  their  rising  liberty  and  their  flourishing  industry,  were 
soon  obliged  to  conclude  a  close  defensive  alliance  to  protect 
themselves  from  brigands  who  disturbed  their  trade  by  land  and 
by  sea.  With  this  view,  Hamburg  and  Lubeck  formed  in  1241 
a  league,  which,  in  the  course  of  that  century,  united  all  the 
cities  of  any  importance  upon  the  coast  of  the  Northern  and 
Baltic  Seas,  upon  the  shores  of  the  Oder,  the  Elbe,  the  Weser 
and  the  Rhine,  to  the  number  of  eighty-five.  That  confederation 
was  called  The  Hanse,  which,  in  low  German,  means  a  union. 

The  Hanse  Towns  soon  discovered  the  advantages  to  be  derived 
by  private  industry  from  their  association,  and  were  not  slow 
in  conceiving  and  developing  a  commercial  policy  from  which 
sprang  a  prosperity  without  previous  example.  Convinced  that 
in  acquiring  and  preserving  a  great  maritime  trade,  a  powerful 
navy  was  necessary  for  its  protection,  the  Hanseatic  cities  pro 
vided  for  this  exigency ;  and  knowing  that  the  maritime  power 
of  a  country  rises  or  falls  with  its  trade,  navigation  and  fisheries, 
they  determined  that  their  goods  should  be  transported  only  in 
their  own  vessels.  They  established  many  great  maritime 
fisheries.  The  Navigation  Act  of  England  was  modelled  upon 
that  of  the  Hanse  Towns,  which  had  for  its  model  that  of 
Venice.* 

England  only  followed  those  who  preceded  her  in  maritime 
supremacy.  Even  at  the  period  of  the  long  Parliament,  the 
proposition  of  an  Act  of  Navigation  was  anything  but  new. 

In  his  appreciation  of  that  measure,  Adam  Smith  f  seems  not 
to  have  known,  or  to  have  suppressed  the  fact  that,  centuries 
before,  and  at  different  times,  attempts  had  been  made  to  intro- 

*  Anderson's  History  of  Commerce, 
f  Wealth  of  Nations  Book  iv.,  chap.  ii. 


92  HISTORY. 

duce  similar  restrictions.  Proposed  by  the  Parliament  of  1461, 
they  were  rejected  by  Henry  VI. ;  proposed  by  James  I., 
they  were  rejected  by  the  Parliament  of  1622.*  Long  previous 
to  these  two  attempts,  in  1381,  they  had  actually  been  applied  by 
Richard  II. ;  but  having  soon  ceased  to  be  operative,  they  were 
forgotten.  The  country  was  evidently  not  yet  ripe  for  such  a 
measure.  Acts  of  Navigation,  as  well  as  the  protection  of 
industry  by  import  duties,  are  so  material  to  nations  having  a 
presentiment  of  future  commercial  and  industrial  grandeur,  that 
the  United  States  were  no  sooner  emancipated  than  they  adopted 
maritime  restrictions,  at  the  instance  of  James  Madison ;  this 
was  done,  too,  as  will  be  seen  in  a  following  chapter,  with  infi 
nitely  greater  success  than  in  England  a  century  and  a  half 
before. 

The  Northern  princes,  to  whom  a  trade  with  the  Hanse  Towns 
promised  great  advantages  in  the  opportunity  it  afforded,  not 
only  of  selling  the  surplus  productions  of  their  soil,  receiving  in 
exchange  manufactured  articles  very  superior  to  their  own,  but 
of  filling  their  treasuries  from  the  avails  of  import  and  export 
duties,  and  of  inuring  to  habits  of  labor  people  previously  ad 
dicted  to  indolence,  debauchery  and  dissensions,  looked  upon  it 
as  a  fortunate  circumstance  when  the  Hanse  Towns  established 
their  commercial  houses  among  them,  and,  to  encourage  this, 
they  granted  them  many  privileges  and  important  favors.  The 
kings  of  England  distinguished  themselves  particularly  in  this 
respect. 

"  The  trade  of  England  had  anciently  been  carried  on  alto 
gether  by  foreigners,  chiefly  the  inhabitants  of  the  Hanse  Towns, 
or  Easterlings,  as  they  were  called ;  and  in  order  to  encourage 
those  merchants  to  settle  in  England,  they  had  been  erected  into 
a  corporation  by  Henry  III.,  had  obtained  a  patent,  were  en 
dowed  with  privileges,  and  were  exempted  from  several  heavy 
duties  paid  by  other  aliens.  So  ignorant  were  the  English  of 
commerce,  that  this  company,  usually  denominated  the  merchants 
of  the  Steel  Yard,  engrossed,  even  down  to  the  reign  of  Edward, 
almost  the  whole  foreign  trade  of  the  kingdom;  and  as  they 

*  Hume's  History.     Part,  iv.,  chap.  xxi. 


HANSE    TOWNS.  93 

naturally  employed  the  shipping  of  their  own  country,  the  navi 
gation  of  England  was  also  in  a  very  languishing  condition."  * 

Long  before  that  period,  German  merchants,  and  especially 
those  of  Cologne,  had  occasionally  dealt  with  England ;  but  in 
1250  they  established  in  London,  upon  the  invitation  of  the  king, 
the  renowned  commercial  association  referred  to  by  Hume  as  the 
Steel  Yard,  which  at  first  exercised  so  favorable  an  influence 
upon  the  development,  culture,  and  industry  of  England,  but 
which  afterward  excited  such  an  intense  national  jealousy,  and 
which,  in  the  375  years  that  elapsed  from  its  rise  to  its  dissolu 
tion,  furnished  occasion  for  such  long  and  acrimonious  debates. 

England  was  then  to  the  Hanse  Towns  what  Poland  was  later 
to  Holland,  and  what  Germany  was  to  England ;  she  supplied 
them  with  wool,  tin,  skins,  butter,  and  other  productions  of  her 
mines  and  her  agriculture  ;  she  received  from  them  in  exchange 
manufactured  articles.  The  raw  materials  which  the  merchants 
of  the  League  purchased  in  England  and  in  other  Northern 
kingdoms  were  transported  by  them  to  their  colony  of  Bruges, 
founded  1252,  and  exchanged  for  cloths  and  other  manufactured 
goods  of  Belgium,  and  for  various  products  of  the  East  coming 
from  Italy,  which  they  distributed  among  the  countries  situated 
around  the  North  Sea. 

A  third  agency  established  in  1272  at  Novogorod,  in  Russia, 
dealt  in  furs,  flax,  hemp,  and  other  raw  materials,  in  exchange 
for  manufactured  products. 

A  fourth  agency  established  in  1278  at  Bergen,  in  Norway, 
was  chiefly  devoted  to  fisheries  and  to  a  trade  in  oil  and  fish. 

The  experience  of  all  countries  and  all  times  teaches  that 
so  long  as  a  nation  is  in  a  state  of  barbarism,  an  entirely  free 
trade,  which  carries  off  the  products  of  its  hunting-grounds,  its 
pastures,  its  forests,  and  its  fields,  in  a  word,  its  raw  materials 
of  every  kind,  and  brings  in  return  better  clothing  and 
furniture,  as  well  as  more  perfect  tools,  with  a  supply  of  the 
grand  instrument  of  exchange,  the  precious  metals,  confers 
immense  advantages.  A  people  in  that  condition  may  well 
rejoice  in  free  trade  so  long  as  it  advances  them  in  the  career 

*  Hume's  History  of  England,  ch.  xxxv.  10. 


94  HISTORY. 

of  civilization.  But  experience  teaches  also  that  in  proportion 
as  such  a  nation  makes  progress  in  industry  and  civilization,  it 
must  experience  a  change  in  its  internal  economy  which  will 
show  that  free  trade  is  no  longer  its  policy  or  its  advantage.  It 
was  so  with  the  trade  between  England  and  the  Hanseatic  cities. 
A  century  had  not  elapsed  since  the  foundation  of  the  Steel 
Yard  agency,  when  it  occurred  to  Edward  III.  that  possibly  a 
wiser  and  more  useful  policy  might  be  pursued  than  to  export 
raw  wools  and  to  import  cloths.  He  began  by  offering  induce 
ments  of  every  kind  to  the  manufacturers  of  wool  in  Flanders  to 
attract  them  to  England ;  and,  having  succeeded  with  a  goodly 
number,  he  prohibited  the  importation  of  foreign  cloths. 

The  wise  measures  of  that  sovereign  were  marvellously  pro 
moted  by  the  foolish  policy  of  other  rulers,  a  thing  not  uncom 
mon  in  the  history  of  industry.  Whilst  the  ancient  masters  of 
Flanders  and  Brabant  had  exerted  themselves  to  increase  and 
reward  industry  around  them,  the  new  counts  seemed  to  make 
it  their  study  to  excite  the  distrust  and  enmity  of  tradesmen 
and  manufacturers,  and  to  drive  them  out  of  their  dominions.* 

After  1413  the  woollen  industry  of  England  made  such 
progress,  that  Hume  could  say  of  that  period,  "A  great  jealousy 
then  existed  with  regard  to  foreign  merchants:  they  had  to 
encounter  a  multitude  of  difficulties ;  for  instance,  they  were 
obliged,  with  the  money  they  obtained  from  their  imports,  to 
buy  domestic  productions." 

Under  Edward  IV.,  this  jealousy  increased  to  such  a  degree 
that  the  importation  of  foreign  cloths  and  many  other  articles, 
was  entirely  prohibited. 

Though  the  King  was  afterwards  compelled  by  the  Hanse 
Towns  to  revoke  that  prohibition  and  to  restore  their  ancient 
privileges,  English  industry  seems  to  have  been  vastly  advanced 
by  that  measure ;  for  Hume,  referring  to  the  reign  of  Henry 
VII.,  which  was  subsequent  to  that  of  Edward  IV.  by  half  a 
century,  says:  —  "The  increase  of  the  arts,  more  effectually 
than  all  the  severities  of  law,  put  an  end  to  this  pernicious 
practice.  The  nobility,  instead  of  vying  with  each  other  in  the 

*  Ryiner's  Fcedera.     De  Witte.    Interests  of  Holland. 


HANSE    TOWNS.  95 

number  and  boldness  of  their  retainers,  acquired  by  degrees  a 
more  civilized  species  of  emulation,  and  endeavored  to  excel  in 
the  splendor  and  elegance  of  their  equipage,  houses  and  tables ; 
the  common  people,  no  longer  maintained  in  vicious  idleness  by 
their  superiors,  were  obliged  to  learn  some  calling  or  industry, 

and  become  useful  both  to  themselves  and  to  others 

Laws  were  made  against  the  exportation  of  money,  plate,  or 
bullion :  a  precaution  which  serves  no  other  purpose  than  to 
cause  more  to  be  exported.  But  so  far  was  the  anxiety  on  this 
head  carried,  that  merchants  alien,  who  imported  commodities 
into  the  kingdom,  were  obliged  to  invest  in  English  commodities 
all  the  money  acquired  by  their  sales,  in  order  to  prevent  their 
conveying  it  away  in  a  clandestine  manner."* 

In  the  reign  of  Henry  VIII.  the  number  of  foreign  manufac 
turers  had  become  so  great  in  London,  as  visibly  to  enhance  the 
value  of  food  thereby,  furnishing  a  manifest  proof  of  the  ad 
vantages  which  the  agriculture  of  a  country  derives  from  the 
development  of  domestic  and  manufacturing  industry. 

The  King,  however,  mistaking  the  causes  and  the  consequences 
of  this  fact,  gave  ear  to  unfounded  complaints  of  English  manu 
facturers  against  foreign  manufacturers,  more  skilful,  laborious 
and  economical  than  themselves,  and  ordered  fifteen  thousand 
Belgians  to  be  expelled,  because  they  increased  the  cost  of  living, 
and  exposed  the  country  to  the  danger  of  a  famine.  To  destroy 
the  evil  to  the  very  root,  sumptuary  laws,  regulations  for  clothing, 
tariffs  fixing  the  price  of  food,  and  the  rates  of  wages,  were 
immediately  issued  and  enforced. 

This  policy  was  fully  approved  by  the  Hanse  Towns,  and  their 
ships  of  war  were  placed  at  the  disposal  of  the  King  with  the 
same  promptitude  they  had  shown  when  previous  kings  of 
England  had  favored  them.  England  in  our  day  shows  the  same 
favor,  and  for  the  same  reason,  to  the  Kings  of  Portugal. 
During  all  that  reign  the  commerce  of  the  Hanse  Towns  with 
England  continued  to  be  very  active.  They  had  ships  and 
money,  and  knew  how,  as  do  the  English  of  our  time,  to  employ 
them  skilfully  in  acquiring  influence  over  nations  and  govern- 

*  Hume,  History  of  England ;  chap.  xxvi.  14. 


96  HISTORY. 

ments  not  stirewd  enough  to  comprehend  their  own  interests; 
their  arguments,  however,  rested  upon  different  grounds  from 
those  of  our  commercial  monopolists.  The  Hanseatic  merchants 
claimed  their  privilege  of  furnishing  nations  with  manufactured 
articles,  in  virtue  of  treaties  and  immemorial  usage :  but  the 
English  now  claim  this  right  in  virtue  of  a  theory,  the  author 
of  which  was  one  of  their  Custom-House  officers.  They  claim 
in  the  name  of  a  pretended  science,  what  was  formerly  claimed 
in  virtue  of  compact  and  as  a  matter  of  right. 

In  the  reign  of  Edward  VI.  the  Privy  Council  sought  and 
found  pretences  for  the  withdrawal  of  the  privileges  granted  to 
the  merchants  of  the  Steel  Yard.  "  Several  remonstrances 
were  made  against  this  innovation  by  Lubec,  Hamburg,  and 
other  Hanse  Towns ;  but  the  Privy  Council  persevered  in  their 
resolution,  and  the  good  effects  of  it  soon  became  visible  to  the 
nation.  The  English  merchants,  by  their  very  situation  as 
natives,  had  advantages  above  foreigners  in  the  purchase  of 
cloth,  wool,  and  other  commodities ;  though  these  advantages 
had  not  hitherto  been  sufficient  to  rouse  their  industry,  or 
engage  them  to  become  rivals  to  this  opulent  company :  but 
when  aliens'  duty  was  also  imposed  on  all  foreigners  indiscrimi 
nately,  the  English  were  tempted  to  enter  into  commerce ;  and 
a  spirit  of  industry  began  to  appear  in  the  kingdom."  * 

After  having  been  for  several  years  wholly  excluded  from  a 
market  of  which  they  had  enjoyed  for  three  centuries  almost 
exclusive  possession,  like  that  enjoyed  by  the  English  of  our 
day  in  the  United  States,  and  in  Germany,  they  were  reinstated 
by  Queen  Mary  in  their  ancient  privileges,  at  the  instance  of 
the  Emperor  of  Germany. 

But  this  time  their  joy  was  of  a  short  duration,  f  "  With  the 
view  not  only  of  preserving,  but  of  increasing  these  privileges, 
they  complained  loudly  at  the  beginning  of  the  reign  of  Eliza 
beth  of  the  treatment  they  had  met  under  the  reigns  of  Edward 
and  Mary.  The  Queen  replied  very  adroitly  that  it  was  not  in 

*  Hume,  History  of  England,  chap,  xxxv.,  10. 
f  Hume,  History,  chap,  xxxvii. 


HA  NSE    TOWNS.  97 

i* 

her  power  to  make  changes,  but  that  she  would  cheerfully  leave 
the  Hanse  merchants  in  possession  of  all  the  privileges  and 
immunities  then  enjoyed  by  them.  This  response  did  not  satisfy 
them.  A  short  time  after,  their  commerce  was  again  suspended, 
to  the  great  profit  of  the  English  merchants,  who  had  then  an 
opportunity  of  showing  of  what  they  were  capable.  The  English 
merchants  soon  acquired  the  whole  foreign  commerce,  and 
their  industrial  efforts  were  crowned  with  complete  success.  ,They 
separated  into  two  classes  ;  one  taking  the  home  trade,  the  others 
seeking  their  fortune  abroad,  by  exporting  cloths  and  other 
English  productions.  This  success  excited  the  envy  of  the 
Hanseatics  to  such  a  point  that  they  spared  no  pains  to  discredit 
the  English  merchants.  They  even  obtained  an  imperial  edict 
which  interdicted  to  the  English  commerce  with  the  interior  of 
Germany ;  in  reprisal  for  which  measure  the  Queen  ordered 
sixty  of  the  Hanseatic  vessels  engaged  in  smuggling  in  concert 
with  the  Spaniards,  to  be  seized.  Her  intention  was  at  first 
only  to  bring  the  Hanseatic  merchants  to  an  amicable  arrange 
ment.  But  on  receipt  of  the  news  that  a  Diet  of  Hanse  mer 
chants  was  then  in  session  at  Lubec,  deliberating  on  the  means 
of  placing  obstacles  in  the  way  of  English  foreign  commerce, 
she  confiscated  these  ships  with  their  cargoes;  two,  however, 
were  released  and  sent  to  Lubec  with  this  message,  that  she  had 
the  most  profound  contempt  for  the  Hanseatic  League,  its 
deliberations,  and  its  measures."* 

Such  was  the  treatment  received  from  Elizabeth  by  those 
merchants,  from  whom  her  father  and  many  other  kings  of 
England  had  borrowed  ships  of  war  for  the  defence  of  their 
country,  merchants  to  whom  all  the  Protestants  of  Europe  had 
paid  court,  whose  vassals  for  several  centuries  were  the  kings 
of  Denmark  and  Sweden,  who  had  according  to  their  fancy  dis 
posed  of  thrones  and  powers,  who  had  colonized  and  civilized  all 
the  south-eastern  coasts  of  the  Baltic,  and  banished  piracy  from 
all  the  seas  of  Europe ;  who  at  a  period  not  very  remote  had 
drawn  the  sword  to  compel  a  king  of  England  to  respect  the 
privileges  of  his  subjects ;  who  more  than  once  had  the  crowns 

*  Lives  of  the  Admirals ;  vol.  p.  410. 


98  HISTORY. 

of  English  kings  in  pledge ;  and  who  had  carried  their  insolence 
and  cruelty  towards  England  so  far  as  to  drown  an  hundred 
English  fishermen  for  venturing  too  near  their  fisheries.  The 
Hanseatic  cities  were  still  powerful  enough  to  avenge  themselves 
upon  the  Queen ;  but  their  ancient  courage,  their  noble  enter 
prise,  the  power  they  derived  from  liberty  and  their  league  —  all 
that  had  vanished.  They  were  becoming  constantly  more 
enfeebled,  until  at  last,  in  1630,  they  dissolved  formally  their 
League;  after  having  begged  at  the  door  of  every  European 
power  the  privilege  of  free  trade,  and  having  met  in  every 
instance  an  humiliating  refusal. 

Various  external  causes,  independently  of  those  internal,  of 
which  we  shall  have  occasion  hereafter  to  speak,  contributed  to 
their  fall.  Denmark  and  Sweden  meaning  to  avenge  their  long 
subjection  to  the  League,  placed  every  possible  obstruction  in 
the  way  of  the  commerce  of  the  Hanse  Towns.  The  Czars  of 
Russia  had  granted  privileges  to  an  English  company.  The  order 
of  Knights,  their  secular  allies,  and  the  very  children  of  the 
League,  were  in  a  state  of  decline  and  fast  tending  to  their  dis 
solution.  The  Dutch  and  the  English  had  thrust  them  out  of 
their  markets,  and  supplanted  their  influence  in  the  courts  of 
Europe.  The  discovery  of  the  route  to  the  East  by  the  Cape  of 
Good  Hope  was  also  a  blow  to  their  commercial  supremacy. 

The  Hanse  Towns,  which,  in  the  days  of  their  power  and 
prosperity,  almost  forgot  that  they  belonged  to  the  Empire  of 
Germany,  in  their  present  distress  applied  to  the  Diet,  and  urged 
that  the  English  yearly  exported  200,000  pieces  of  cloth,  a  large 
portion  of  which  went  to  Germany,  and  that  the  only  means  of 
recovering  their  ancient  privileges  in  England  was  prohibition 
of  English  cloths  by  Germany.  Anderson  informs  us  that  a 
resolution  to  this  effect  was  offered  in  the  Diet,  and  perhaps 
agreed  to ;  but  he  adds  that  Gilpin,  the  English  ambassador  to 
the  German  diet,  succeeded  in  preventing  its  being  enforced. 

One  hundred  and  fifty  years  after  the  official  dissolution  of 
the  Hanseatic  League,  the  cities  which  formed  it  had  lost  all 
recollection  of  their  past  grandeur.  Justus  Moser  somewhere 
remarks  that  if  he  should  describe  to  the  merchants  of  these 


HANSE    TOWNS.  99 

cities  the  power  and  grandeur  of  their  ancestors,  they  would 
hardly  helieve  it.  Hamburg,  formerly  the  terror  of  pirates  in 
every  sea,  celebrated  throughout  all  Christendom  by  the  services 
it  had  rendered  in  the  destruction  of  the  Corsairs,  had  fallen  so 
low  as  to  be  compelled  to  purchase  from  Algiers  by  a  yearly 
tribute  the  safety  of  her  own  ships ;  for,  the  sceptre  of  the  seas 
having  passed  to  the  hands  of  the  Dutch,  another  policy  pre 
vailed  in  regard  to  piracy.  When  the  Hanse  Towns  were  at  the 
height  of  their  power,  they  treated  pirates  as  the  enemies  of  the 
civilized  world,  and  gave  themselves  earnestly  to  the  work  of 
their  extermination.  The  Dutch,  on  the  contrary,  looked  upon 
the  Corsairs  of  Algiers  as  important  co-operators,  by  whose  aid 
the  foreign  commerce  of  their  rivals,  in  time  of  peace,  was  para 
lyzed  until  it  gradually  fell  into  their  hands.  Referring  to  an 
observation  of  De  Witte  upon  that  policy,  Anderson  merely 
remarks,  fas  est  et  ab  hoste  doceri,  a  monition  which,  though 
brief,  has  enjoyed  a  long  acquiescence  on  the  part  of  England, 
where  this  doctrine  was  fully  appreciated ;  for,  to  the  shame  of 
Christendom,  England  tolerated  the  piracies  of  the  infamous 
Algerine  corsairs  down  to  our  time.  The  signal  merit  of  de 
stroying  them  had  been  reserved  for  France. 

The  commerce  of  the  Hanseatic  cities  was  not  a  national  one ; 
it  was  neither  established  upon  an  equilibrium,  nor  upon  a  com 
plete  development  of  the  productive  power  of  the  country,  nor 
was  it  sustained  by  adequate  political  power.  The  bonds  which 
united  the  members  of  the  confederation  were  too  weak ;  their 
desire  of  separate  preponderance  and  private  advantage  was  so 
strong  as  to  banish  federal  patriotism,  which  alone  could  excite 
a  national  feeling  and  place  the  interests  of  the  entire  League 
above  those  of  the  respective  cities.  Hence  jealousy  and  often 
treachery ;  thus  Cologne  took  advantage  of  the  enmity  of 
England  to  the  League,  and  Hamburg  tried  to  make  profit  out 
of  a  quarrel  between  Denmark  and  Lubec. 

The  commerce  of  the  Hanse  towns  was  not  founded  upon 
production  and  consumption,  nor  upon  the  agricultural  and 
manufacturing  industry  of  the  countries  to  which  they  belonged. 
They  had  neglected  to  develop  the  agriculture  of  their  own 


100  HISTOKY. 

territories,  although,  by  their  commerce,  they  gave  a  great 
impulse  to  that  of  foreign  countries.  They  found  it  more  con 
venient  to  buy  manufactured  articles  in  Belgium  than  to  estab 
lish  manufactures  of  their  own ;  they  promoted  agriculture  in 
Poland,  they  encouraged  the  rearing  of  sheep  in  England,  the 
production  of  iron  in  Sweden,  and  they  stimulated  general 
industry  in  Belgium.  They  exemplified  for  several  centuries 
the  maxim  of  the  theorists  of  our  day ;  they  purchased  goods 
where  they  could  purchase  them  cheapest.  But  when  they  were 
excluded  from  the  countries  where  they  bought  and  where  they 
sold,  their  agriculture  and  manufactures  had  not  sufficient  de 
velopment  to  absorb  and  employ  the  overplus  of  their  commercial 
capital.  This  capital  emigrated  to  Holland  and  England,  where 
it  increased  the  industry,  the  wealth,  and  the  power  of  their 
enemies.  In  this  fact  we  have  clear  proof  that  private  industry, 
left  to  itself,  does  not  always  select  the  true  path  to  national 
prosperity  and  power,  nor  even  to  its  own  eventual  success. 

In  their  exclusive  pursuit  of  material  wealth  those  cities  com 
pletely  lost  sight  of  their  political  interests.  When  their  power 
was  at  its  height,  they  seemed  scarcely  to  belong  to  Imperial 
Germany.  That  narrow-minded,  selfish,  and  haughty  common 
ality  was  flattered  by  the  attentions  of  princes,  kings,  emperors, 
and  by  their  acknowledged  position  as  sovereign  of  the  seas. 
How  easy  had  it  been  for  the  League,  at  the  time  of  its  mari 
time  supremacy,  to  form  in  concert  with  the  confederate  cities 
of  Upper  Germany  a  powerful  House  of  Commons,  as  a  counter 
poise  to  the  aristocracy  of  the  Empire,  to  establish,  by  the  aid 
of  the  emperors,  a  national  unity ;  to  combine  in  one  nation  all 
the  sea  coast  from  Dunkirk  to  Riga,  and  thus  to  seize  and1 
secure  for  Germany  a  supremacy  in  industry,  in  commerce,  and 
in  navigation. 

But  when  the  sceptre  of  the  seas  fell  from  the  hands  of  the 
League,  it  did  not  retain  in  the  German  Diet  sufficient  influence 
to  have  its  commerce  regarded  as  a  national  interest.  On  the 
other  hand,  the  aristocracy  applied  themselves  earnestly  to  the 
work  of  its  humiliation.  The  cities  of  the  interior  fell,  one  by 


HANSE    TOWNS.  101 

one,  into  the  hands  of  absolute  monarchs,  and  those  on  the  coast 
thus  lost  their  trade  with  the  interior. 

These  mistakes  were  all  avoided  in  England.  There,  external 
commerce  and  navigation  laid  the  foundation  for  home  agri 
culture  and  manufacturing  industry;  there  the  interior  trade 
increased  concurrently  with  the  external  commerce,  and  in 
dividual  liberty  increased  without  prejudice  to  national  unity 
and  power;  there  were  consolidated  and  united  in  the  most 
happy  manner  the  interests  of  the  crown,  of  the  aristocracy, 
and  of  the  commons. 

In  face  of  these  historical  facts  how  can  it  be  maintained,  that 
England,  without  her  peculiar  policy,  could  have  so  exalted  the 
success  of  her  manufacturing  industry,  or  have  attained  the 
commercial  and  maritime  ascendency  she  now  enjoys  ?  No :  the 
proposition  that  England  has  not  reached  her  actual  commercial 
grandeur  by  virtue  of,  but  in  despite  of  her  commercial  policy, 
is  in  our  belief  one  of  the  greatest  fallacies  of  our  time.  If  the 
English  had  abandoned  business  to  its  own  channels,  if  they  had 
refrained  from  all  regulation,  (laissez  faire\  as  required  by  the 
reigning  school,  the  merchants  of  the  Steel- Yard  would  still 
monopolize  the  foreign  trade  of  London,  and  the  Belgians  would 
still  manufacture  cloths  for  the  English  markets  ;  England  would 
be  still  the  sheep-pasture  of  the  League,  as  Portugal,  by  virtue 
of  the  strategeins  of  diplomatic  cunning,  became  and  continues 
to  be  the  vineyard  of  England. 

Nay,  it  is  more  than  probable,  that  but  for  her  past  commer 
cial  policy,  England  would  not,  at  this  day,  enjoy  the  degree  of 
civil  liberty  for  which  she  is  now  so  distinguished;  for  that 
liberty  is  the  child  of  industry  and  competence. 

After  this  glance  at  history,  we  have  reason  to  wonder  that 
Adam  Smith  did  not  attempt  to  trace  from  their  origin  the 
industrial  and  commercial  struggles  between  the  League  and 
England.  Some  passages  of  his  work  show,  however,  that  the 
causes  of  the  fall  of  the  League  and  its  consequences  were  not 
unknown  to  him. 

"  A  merchant,  it  has  been  said,  very  properly,  is  not  neces 
sarily  the  citizen  of  any  particular  country.  It  is,  in  a  great 


102  HISTORY. 

measure,  indifferent  to  him  from  what  place  he  carries  on  his 
trade,  and  a  very  trifling  disgust  will  make  him  remove  his 
capital,  and  together  with  it  all  the  industry  which  it  supports, 
from  one  country  to  another.  No  part  of  it  can  be  said  to 
belong  to  any  particular  country,  till  it  has  been  spread,  as  it 
were,  over  the  face  of  that  country,  either  in  buildings  or  in  the 
lasting  improvements  of  lands.  No  vestige  now  remains  of  the 
vast  wealth  said  to  have  been  possessed  by  the  greater  part  of 
the  Hanse  Towns,  except  in  the  obscure  histories  of  the  thir 
teenth  and  fourteenth  centuries.  It  is  even  uncertain  where 
some  of  them  were  situated,  or  to  what  towns  in  Europe  the 
Latin  names  given  to  some  of  them  belong."  * 

It  is  strange  that  Adam  Smith,  with  so  clear  a  comprehension 
of  the  secondary  causes  which  had  produced  the  fall  of  the 
League,  had  not  been  led  to  seek  for  the  first  causes.  He  had 
no  need  for  that  purpose  to  inquire  where  those  Hanseatic  cities 
were  placed  which  have  disappeared,  nor  by  what  Latin  names 
they  are  designated  in  obscure  chronicles;  his  countrymen, 
Anderson,  Macpherson,  King,  and  Hume,  would  have  given  him 
ample  instruction  on  this  subject. 

But  how  and  why  could  a  mind  so  penetrating  abstain  from 
so  interesting  and  fruitful  an  investigation  ?  The  only  motive 
we  can  suggest,  was  that  it  would  have  conducted  him  to  results 
little  suited  to  confirm  his  principle  of  absolute  free  trade.  He 
could  not  have  failed  to  perceive,  that  after  free  trade  with  the 
Hanseatic  cities  had  raised  English  agriculture  above  Its  early 
imperfections,  the  restrictive  policy  adopted  afterwards  by  the 
government  had  raised  England  at  the  expense  of  the  League, 
of  the  Belgians,  and  of  the  Dutch,  to  undisputed  manufacturing 
and  commercial  supremacy. 

It  appears  that  Adam  Smith  was  unwilling  to  know  or  to 
admit  these  facts ;  they  belonged  apparently  to  that  class  of 
stubborn  events  which  J.  B.  Say  confesses  to  have  been  rebels 
to  his  system. 

*  Wealth  of  Nations,  Book  iii.,  chap.  4. 


FLANDERS    AND    HOLLAND.  103 

••• 

CHAPTER  III. 
FLANDERS  AND  HOLLAND. 

GENIUS  and  manners,  origin  and  language,  as  well  as  political 
relations  and  geographical  position,  connected  the  people  of 
Holland,  Flanders,  and  Brabant,  with  the  German  empire. 
Those  provinces  had  experienced  the  benefit  of  frequent  and 
prolonged  visits  from  Charlemagne,  and  also  from  the  proximity 
of  his  residence ;  in  this  they  were  more  fortunate  than  more 
distant  countries  of  Germany.  Flanders  and  Brabant  were 
indeed  particularly  favored  by  nature  for  agriculture  and  manu 
facturing  industry,  as  Holland  for  pasturage  and  commerce.  In 
no  province  of  Germany  could  a  vast  maritime  and  river  navi 
gation  promote  internal  communication  so  successfully  as  in 
those  countries.  The  salutary  influence  of  water  transportation 
in  the  promotion  of  agriculture  and  in  the  growth  of  cities, 
necessarily  gave  early  stimulus  to  the  progress  of  such  works  as 
were  fitted  to  increase  the  facilities  of  internal  navigation. 

Flanders  was  especially  indebted  for  its  splendor  to  its  Counts, 
who  understood  better  than  other  German  princes  the  value 
of  public  security,  the  advantage  of  roads,  manufactures,  and 
prosperous  cities.  Aided  by  the  nature  of  the  soil,  their  favorite 
occupation  was  to  purge  the  country  of  a  nobility  scarcely  better 
than  brigands,  and  of  noxious  animals.  A  natural  consequence 
was  the  establishment  of  a  lively  intercourse  between  the  cities 
and  the  country,  and  the  development  of  agriculture  in  the 
department  of  live  stock,  and  particularly  of  sheep,  as  well  as 
in  the  culture  of  flax  and  hemp.  Where  raw  materials  are  pro 
duced  in  great  abundance,  labor  and  skill  will  soon  bring  them 
into  use  if  property  and  commerce  enjoy  security.  The  Counts 
of  Flanders  did  not  wait  until  chance  or  the  current  of  events 
brought  them  weavers  of  woollens,  but  history  informs  us  that 
they  invited  them  from  foreign  countries. 

Through  the  intermediate  commerce  of  the  Hanse  Towns  and 
Holland,  Flanders  soon  became,  by  her  woollen  manufactures, 


104  HISTORY. 

the  commercial  centre  of  the  North,  as  Venice,  by  its  industry 
and  maritime  trade,  became  the  commercial  centre  of  the  South. 
The  navigation  and  the  intermediate  commerce  of  the  League 
and  Holland,  formed,  with  the  Flemish  manufactures,  a  whole, 
a  system  of  national  industry.  The  manufacturing  industry  of 
Flanders,  encountering  no  rivalry,  commercial  restrictions  could 
not  come  in  question.  The  Counts  of  Flanders,  without  having 
read  Adam  Smith,  understood  that  in  their  condition  free  trade 
was  exactly  suited  to  their  circumstances.  It  was  entirely  in 
the  spirit  of  this  theory,  that  Count  Robert  III.,  when  requested 
by  the  king  of  England  to  exclude  the  Scotch  from  his  markets, 
answered,  that  in  the  view  of  his  people,  Flanders  was  always 
to  be  an  open  market  for  all  nations,  and  that  their  own  interest 
did  not  permit  any  departure  from  that  rule. 

After  Flanders  had  been  for  several  centuries  the  chief  manu 
facturing  country,  and  Bruges  the  chief  market  of  Northern 
Europe,  industry  and  commerce,  to  wjiich  the  Counts  had  failed 
to  make  the  concessions  always  due  to  them  when  they  have 
attained  a  certain  degree  of  prosperity,  emigrated  to  Brabant. 
Antwerp  became  then  the  chief  commercial  city,  and  Louvain 
the  chief  manufacturing  city  of  Northern  Europe.  This  revolu 
tion  gave  agriculture  an  immediate  upward  impulse  in  Brabant. 
The  change  effected  at  an  early  day,  from  taxes  in  kind  into  taxes 
in  money,  and  especially  a  modification  of  the  feudal  system, 
contributed  also  largely  to  its  development. 

In  the  meanwhile,  the  Dutch,  by  a  wise  combination  of  their 
resources  and  their  power,  and  by  constant  competition  with  the 
League,  had  laid  the  foundation  of  their  future  maritime  su 
premacy.  The  advantages  and  disadvantages  of  their  position 
had  been  alike  to  that  people  a  source  of  blessings.  A  perpetual 
struggle  against  invasion  by  the  sea,  forcibly  developed  among 
them  a  spirit  of  enterprise,  activity,  and  economy ;  a  soil  rescued 
by  art  and  industry  from  the  waves,  and  only  to  be  held  from 
the  dominion  of  the  sea  by  ceaseless  vigilance,  became  for  them 
a  precious  possession,  upon  which  they  could  not  lavish  too  much 
labor.  Limited  by  nature  to  navigation,  fishing,  the  pasturage 
of  cattle,  the  production  of  butter  and  cheese,  the  Dutch  neces- 


FLANDEKS    AND    HOLLAND.  105 

sarily  turned  their  attention  to  the  carrying  trade,  to  interme 
diate  commerce,  to  ^he  export  of  cheese  and  fish,  thus  earning 
wherewithal  to  purchase  their  bread,  building  materials,  fuel, 
and  clothing. 

We  find  in  these  circumstances  the  chief  cause  by  which  the 
Hanseatic  cities  were  gradually  supplanted  by  the  Dutch  in  the 
trade  with  the  Northern  States.  The  Dutch  needed  far  more 
considerable  quantities  of  agricultural  products  and  the  products 
of  the  forest  than  the  cities  of  the  League,  which,  for  the  main 
part,  found  their  supplies  in  their  respective  vicinities.  The 
proximity  of  Belgian  manufactures,  and  those  of  the  Rhine, 
with  its  vast  and  fertile  valley,  rich  in  wine,  and  with  a  naviga 
tion  extending  to  the  mountains  of  Switzerland,  was  also  a  very 
great  advantage  to  them. 

It  is  a  general  rule  that  the  commercial  activity  and  prosperity 
of  the  seabord,  depend  upon  the  greater  or  less  importance  of 
the  river  navigation  with  which  it  is  connected.*  A  glance  at  the 
map  of  Italy  shows  that  the  fertility  and  great  extent  of  the 
valley  of  the  Po  explains  the  decided  superiority  of  the  com 
merce  of  Venice  over  that  of  Pisa  and  Genoa.  The  commerce 
of  Holland  was  sustained  by  the  valley  of  the  Rhine  and  its 
tributaries  ;  and  therefore  exceeded  that  of  the  Hanseatic  cities 
in  proportion  as  its  valley  surpassed  in  wealth  and  fertility  those 
of  the  Weser  and  the  Elbe. 

A  happy  discovery  added  to  those  advantages:  the  art  of 
curing  and  preserving  herrings  with  salt.  The  processes  of  this 
fishery  and  this  mode  of  curing,  discovered  by  Peter  Boeckel, 
remained  long  a  secret  with  the  Dutch ;  they  succeeded  thus  in 
giving  to  a  production  of  their  fishery  qualities  not  found  in  the 
herrings  of  other  nations,  and  which  ensured  them  everywhere 
a  certain  market  and  better  prices.  Anderson  affirms  that 
several  centuries  after  these  new  processes  had  been  used  in 
Holland,  the  English  and  Scotch  fisheries,  although  enjoying 
large  premiums  upon  exportation,  could  not  find  a  market  in 
foreign  countries  for  their  herrings,  even  at  lower  rates.  Now, 
if  we  consider  the  importance,  before  the  Reformation,  of  the 

*  Railroads  have  materially  modified  this  rule. 


106  HISTORY. 

consumption  of  sea-fish,  it  will  be  easy  to  understand  how,  in  a 
period  when  the  navigation  of  the  League  began  to  decline,  the 
Dutch  were  able  to  build  every  year  two  thousand  ships. 

The  Union  of  all  the  Belgian  and  Batavian  provinces  under 
the  dominion  of  Burgundy,  procured  for  that  country  the  great 
benefit  of  national  unity,  a  circumstance  not  to  be  overlooked 
in  the  study  of  the  causes  which  gave  to  the  Dutch  advantages 
over  the  rival  cities  of  Northern  Germany.  Under  Charles  V., 
the  Netherlands  comprised  an  union  of  power  and  resources 
which  more  certainly  assured  him  supremacy  by  land  and  sea 
than  all  the  mines  of  gold  in  the  world,  more  certainly  than  the 
favor  of  the  Pope  and  all  his  bulls,  if  he  had  but  understood  the 
nature  of  that  power,  and  known  how  to  seize  and  to  use  it. 

If  Charles  V.  had  thrust  from  him  the  crown  of  Spain,  as  a 
man  thrusts  away  a  stone  which  threatens  to  carry  him  into  an 
abyss,  how  different  would  have  been  the  destiny  of  the  Nether 
lands  as  a  part  of  Germany !  As  sovereign  of  the  Netherlands, 
emperor  of  Germany,  and  chief  of  the  Reformation,  Charles  had 
in  his  hands  all  the  means,  moral  and  material,  for  founding  the 
most  powerful  industrial  and  commercial  nation,  the  widest 
maritime  and  continental  authority  which  had  ever  existed,  a 
maritime  supremacy  which  would  have  united  under  one  flag 
every  sail  from  Dunkirk  to  Riga. 

It  needed  but  one  idea,  but  the  will  of  one  man,  to  render 
Germany  the  richest  and  most  important  empire  of  the  world,  to 
extend  its  manufacturing  and  commercial  rule  -over  all  parts  of 
the  earth,  and  to  give  it,  perhaps,  centuries  of  duration.  Charles  V. 
and  his  gloomy  son,  Philip  II.,  adopted  a  different  policy; 
becoming  the  leaders  of  the  fanatics,  they  strove  to  make  the 
Netherlands  a  Spanish  country.  The  consequences  are  well 
known.  The  Northern  provinces,  defended  by  the  sea,  of  which 
they  made  themselves  master,  achieved  their  independence ;  in 
the  Southern,  industry,  arts,  and  commerce,  as  they  could  not 
escape  by  flight,  perished  by  the  hand  of  the  executioner,  and  Am 
sterdam  took  the  place  of  Antwerp  as  the  centre  of  the  commer 
cial  world.  The  cities  of  Holland,  where  formerly,  after  the 
troubles  of  Brabant,  a  great  number  of  Belgian  weavers  had  taken 


FLANDERS    AND    HOLLAND.  107 

refuge,  could  scarce  now  find  room  for  the  new  fugitives,  many  being 
obliged  to  emigrate  to  England  and  Saxony.  The  struggle  for 
independence  gave  birth  in  Holland  to  that  naval  courage,  which 
overcame  all  difficulties  and  all  dangers  at  the  very  time  when 
Spain  was  sinking  under  fanaticism.  By  means  of  her  navy, 
Holland  enriched  herself  with  the  spoils  of  Spain,  and  especially 
by  the  capture  of  her  galleons ;  she  carried  on  also  an  immense 
contraband  trade  with  the  Peninsula  and  Belgium.  After  the 
annexation  of  Portugal  to  Spain,  she  seized  the  most  important 
Portuguese  colonies  in  the  East  Indies,  and  conquered  a  part  of 
Brazil.  Down  to  the  middle  half  of  the  seventeenth  century,  we 
find  the  Dutch  as  superior  to  the  English  in  manufactures,  colo 
nies,  and  shipping,  as  the  English  are  in  our  time  superior  to 
the  French. 

But  the  revolution  of  England  involved  great  changes.  The 
spirit  of  liberty  had  begun  to  flag  in  Holland.  As  in  all  aris 
tocracies  of  merchants,  so  long  as  life  and  goods  had  been  in 
peril,  so  long  as  undoubted  material  benefits  were  in  question, 
they  were  capable  of  performing  great  things  ;  but  their  views 
failed  in  depth.  They  did  not  comprehend  that  the  supremacy 
of  conquest  could  only  be  maintained  upon  the  basis  of  a  large 
nationality,  and  an  energetic  national  spirit.  On  the  other  hand, 
in  the  midst  of  states  in  which  monarchy  had  established  nations 
on  a  large  scale,  but  without  bringing  them  forward  in  commerce 
and  industry,  it  was  a  subject  of  mortification  that  so  small  a 
territory  should  occupy  the  chief  place  in  manufactures,  in  trade, 
in  fisheries,  and  in  shipping.  That  feeling  was  connected  in 
England  with  the  energy  of  a  young  republic.  The  Act  of 
Navigation  was  the  glove  which  the  future  supremacy  of  England 
threw  at  the  feet  of  the  existing  supremacy  of  Holland.  And 
when  these  parties  grappled  with  each  other,  it  was  discovered 
that  the  nationality  of  England  was  of  far  greater  power  and 
calibre  than  that  of  Holland.  The  result  could  not  long  be 
doubtful. 

The  example  of  England  was  followed  by  France.  Colbert 
had  calculated  that  the  whole  of  the  maritime  trade  of  France 
employed  about  twenty  thousand  sail,  and  that  of  these,  sixteen 


108  .       HISTOKY. 

thousand  were  Dutch ;  which  was  out  of  proportion  to  the  size  of 
the  country  to  which  they  belonged.  The  Bourbons  having  reached 
the  throne  of  Spain,  France  extended  her  commerce  over  the 
Peninsula  to  the  prejudice  of  the  Dutch.  She  did  the  same  in 
the  East.  At  the  same  time  the  encouragements  given  in  France 
to  manufactures,  to  the  merchant  marine,  and  to  maritime  fish 
eries,  inflicted  upon  the  industry  and  the  commerce  of  the  Dutch 
incalculable  detriment. 

Holland  had  lost  by  the  policy  and  rivalry  of  England  the 
greatest  part  of  her  trade  with  the  Northern  countries,  the  con 
traband  trade  with  Spain  and  her  colonies,  the  chief  part  of 
her  commerce  in  the  East  and  West  Indies,  and  her  fisheries.  But 
the  treaty  of  Methuen,  in  1703,  gave  her  the  finishing  stroke 
by  completing  the  ruin  of  her  commerce  with  Portugal  and 
her  colonies,  and  with  the  East  Indies. 

When  the  external  commerce  of  Holland  began  thus  to  escape 
from  her  hands,  one  could  see  a  renewal  of  what  had  taken  place 
in  the  Hanse  Towns  and  at  Venice  ;  that  portion  of  her  material 
and  moral  capital,  which  was  no  longer  in  demand  at  home, 
passed  by  the  emigration  of  the  people,  or  in  the  form  of 
loans,  to  those  who  had  succeeded  to  the  commercial  ascendency 
of  Holland. 

If  Holland,  reunited  with  Belgium,  had  formed  the  valley  of 
the  Rhine  and  Northern  Germany  into  a  single  nation,  England 
and  France  could  not  without  difficulty,  either  by  war  or  by 
commercial  policy,  have  struck  so  fatal  a  blow  at  her  shipping 
interests,  her  foreign  trade,  or  her  industry.  A  nation  thus 
constituted  would  have  been  in  a  position  to  oppose  its  own  com 
mercial  policy  to  that  of  other  States.  If  its  industry  had 
suffered  from  the  development  of  their  manufactures,  its  internal 
resources  must  have  furnished  ample  compensation  for  the  injury. 
Holland  succumbed  to  her  rivals  because,  with  a  narrow  territory  of 
sea-coast,  inhabited  by  a  small  population  of  fishermen,  seamen, 
merchants,  and  cattle-breeders,  she  could  not  sustain  herself 
as  an  independent  nation,  a  distinct  power,  treating  that 
part  of  the  continent  with  which  she  was  geographically  con 
nected  as  a  foreign  country. 


FLANDERS    ANDHOLLAND.  109 

The  example  of  Holland,  as  well  as  that  of  Belgium,  that  of 
the  Hanse  Towns,  and  that  of  the  Italian  republics,  shows  that 
the  activity  of  individuals  is  powerless  to  preserve  the  commerce, 
industry,  and  wealth  of  a  State,  if  the  general  conditions  of 
society  are  not  favorable  ;  and  that  individuals  owe  the  greatest 
part  of  their  productive  power  to  the  political  organization,  and 
to  the  power  of  the  country  in  which  they  reside. 

The  agriculture  of  Belgium  flourished  anew  under  Austrian 
rule.  Whilst  connected  with  France,  her  manufacturing  indus 
try  resumed  its  former  gigantic  progress.  Holland,  isolated,  was 
not  in  a  position  to  adopt  and  sustain,  in  reference  to  great 
nations,  an  independent  commercial  policy.  From  the  day  of 
her  union  with  Belgium,  after  the  restoration  of  general  peace, 
when  her  resources,  her  population,  her  territory,  had  so  in 
creased  as  to  enable  her  to  maintain  a  distinct  national  policy, 
as  against  rival  nations,  and  to  experience  the  benefit  of  in 
creasing  internal  wealth  and  productive  power,  we  see  the  pro 
tective  system  appear  in  the  Netherlands,  and,  under  its  influ 
ence,  we  find  agriculture,  manufactures,  and  commerce  taking  a 
remarkable  development  and  growth.  The  union  between  the 
two  countries  was  dissolved  by  causes  not  within  the  scope  of 
our  subject ;  the  protective  system  was  undermined  in  Holland, 
whilst  it  subsists  in  full  vigor  in  Belgium. 

Holland  is  now  living  upon  her  colonies  and  her  carrying 
trade  between  the  different  states  of  Germany.  But  the  first 
war  may  deprive  her  of  those  colonies,  and  in  proportion  as  the 
German  Customs  Union,  [Zoll-  Verein],  shall  better  understand 
its  interests,  and  learn  more  perfectly  how  to  use  its  power,  it 
will  assuredly  perceive  the  necessity  of  drawing  Holland  into 
the  League. 


110  HISTORY. 

CHAPTER  IV. 
ENGLAND. 

WE  have  shown,  in  speaking  of  the  Hanse  Towns,  how  agricul 
ture  and  breeding  of  sheep  were  stimulated  in  England  by  foreign 
commerce ;  how,  later,  the  emigration  thither  of  manufacturers 
persecuted  in  their  own  country,  and  the  encouragement  afforded 
them  by  the  government,  had,  by  degrees,  carried  the  industry 
of  woollens  there  to  a  state  of  prosperity ;  how  by  reason  of  that 
progress  and  of  the  measures  of  Queen  Elizabeth,  as  skilful  as 
energetic,  the  external  trade  of  the  country,  previously  monopo 
lized  by  foreigners,  passed  into  the  hands  of  the  natives. 

After  adding  a  few  observations  upon  the  origin  of  English 
industry,  we  shall  resume  the  history  of  the  economical  develop 
ment  of  England  at  the  point  where  we  left  it  in  the  second 
chapter. 

The  industrial  and  commercial  grandeur  of  England  had  its 
origin  chiefly  in  the  breeding  of  cattle  and  in  woollen  manufac 
tures.  When  the  merchants  of  the  Hanseatic  League  landed  in 
England,  agriculture  was  at  a  very  low  stage,  and  even  the 
rearing  of  cattle  was  then  of  little  importance.  Winter  forage 
not  being  produced  in  sufficient  quantities,  a  large  portion  of  the 
domestic  animals  were  necessarily  killed  in  the  autumn,  and  there 
could,  of  course,  be  neither  stock  of  cattle,  nor  abundance  of 
manure.  As  in  all  uncultivated  countries,  like  Germany  in 
former  times,  and  the  solitudes  of  America  at  the  present 
day,  the  people  subsisted,  for  very  obvious  reasons,  mainly  upon 
pork.  Swine  require  but  little  attention ;  they  find  their  own 
provender  in  the  native  forests,  and  in  uncultivated  fields ;  but 
little  care  sufficed  to  perpetuate  the  race  of  animals  upon  which 
it  was  safe  to  rely  for  a  large  portion  of  their  food.  Foreign 
commerce  turned  the  attention  of  the  people  from  swine  to 
sheep,  from  pork  to  mutton  and  wool,  and  to  other  improvements 
in  agriculture. 


ENGLAND.  Ill 

We  find  in  Hume's  History  of  England  very  interesting  details 
of  English  agriculture  at  the  beginning  of  the  fourteenth  century. 
In  1327,  Lord  Spencer  numbered  on  sixty- three  estates,  twenty- 
eight  thousand  sheep,  one  thousand  oxen,  twelve  hundred  cows, 
five  hundred  and  sixty  horses,  and  two  thousand  hogs ;  or  upon 
each  farm  about  four  hundred  and  fifty  sheep,  thirtJjr-fiVe  head 
of  cattle,  nine  horses,  and  thirty-two  hogs.  Even  at. that  early 
period,  we  notice  how  large  the  proportion  of  sheep  compared 
with  that  of  other  animals.  The  great  profits  derived  by  the 
English  aristocracy  from  the  breeding  of  sheep  gave  them  a 
liking  for  that  business,  and  turned  their  attention  strongly  to 
agricultural  improvement  at  a  time  when  almost  everywhere  on 
the  continent  the  nobility  knew  no  better  use  of  their  estates 
than  keeping  quantities  of  deer,  nor  a  more  reputable  occupation 
than  preying  upon  cities  and  their  commerce  in  every  mode  of 
hostile  movements. 

Sheep  multiplied  then  as  we  have  recently  seen  them  increase 
in  Hungary ;  on  many  estates  they  numbered  from  ten  thousand 
to  twenty-four  thousand.  In  this  state  of  things  the  manufac 
ture  of  wool,  already  well  advanced  in  preceding  reigns,  could 
not  fail  of  attaining  rapidly  a  high  degree  of  prosperity  under 
the  fostering  policy  of  Queen  Elizabeth.* 

In  the  memorial  above-mentioned,  by  which  the  cities  of  the 
League  demanded  of  the  German  Diet  measures  of  retaliation,  the 
export  of  cloth  from  England  is  stated  at  two  hundred  thousand 
pieces,  and  as  early  as  the  reign  of  James  I.  the  value  of  cloths 
exported  from  England  had  attained  the  enormous  figure  of  two 
millions  of  pounds  sterling,  whilst  in  1354  the  value  of  wool 
exported  was  but  two  hundred  and  seventy-seven  thousand 
pounds,  and  that  of  other  articles,  sixteen  thousand  four  hundred 
pounds.  Previous  to  the  reign  of  that  prince,  the  chief  part  of 
the  cloths  were  sent  to  Belgium  to  be  there  dyed  and  finished ; 
but  in  consequence  of  the  measures  of  protection  and  favor 

*  The  prohibition  to  export  wool,  and  the  restrictions  upon  the  coasting 
trade  in  reference  to  wool,  were  vexatious  and  unjust  measures:  they  were, 
however,  none  the  less  effective  in  advancing  English  and  in  prostrating 
Flemish  industry. 


112  HISTORY. 

adopted  by  James  I.  and  Charles  I.  the  dyeing  and  finishing 
were  carried  to  such  perfection  in  England  that  the  export 
of  undressed  cloths  was  almost  entirely  discontinued,  and  from 
that  period  the  export  was  only  of  finished  cloths. 

To  give  an  exact  and  complete  idea  of  these  results  of  English 
commercial  policy,  we  should  remark  that,  previous  to  the  great 
progress  in  later  times  in  the  manufacture  of  flax,  cotton,  silk, 
and  iron,  that  of  cloth  constituted  by  far  the  most  important 
item  of  exchange,  not  only  with  the  European  countries,  espe 
cially  those  of  Northern  Europe,  but  with  the  East  and  West 
Indies^  This  is  clearly  evinced  by  the  fact  that  in  the  time  of 
James  I.,  woollen  articles  constituted  nine-tenths  of  the  entire 
value  of  English  exports.* 

That  industry  gave  to  England  the  means  of  supplanting  the 
Hanse  Towns  in  the  markets  of  Russia,  Sweden,  Norway,  and 
Denmark,  and  of  attracting  to  England  the  best  part  of  the 
trade  of  the  Levant  and  the  two  Indies.  It  was  that  which  de 
veloped  mining  industry  and  the  use  of  coal ;  hence  a  considerable 
coasting  trade  and  an  active  fishery,  these  two  being  the  base  of 
that  maritime  power  which  made  the  Act  of  Navigation  possible, 
and  thus  founded  the  naval  supremacy  of  England.  Around 
this  department  of  industry,  as  around  a  common  trunk,  gathered 
successively  the  other  branches  of  manufacture,  and  thus  it 
became  the  centre  of  the  industrial,  commercial,  and  maritime 
power  of  England. 

Other  branches  of  industry  were  not,  however,  neglected,  or 
left  to  spontaneous  growth.  As  early  as  the  reign  of  Queen 
Elizabeth,  the  importation  of  metals,  wrought  leather,  and  a 
variety  of  other  manufactured  articles  had  been  prohibited,  f 
whilst  the  immigration  of  German  miners  and  smiths  had  been 
encouraged.  Previously  the  English  had  purchased  Hanseatic 
ships  constructed  in  the  ports  of  the  Baltic ;  Elizabeth,  by  the 
aid  of  restrictions  and  encouragements,  introduced  the  art  of 
ship-building  into  England.  The  timber  for  that  purpose  was 
imported  from  Northern  countries,  largely  increasing  the  exports 

*  Hume :  year  1603.     Macpherson's  History  of  Commerce  :  year  1651. 
f  Anderson's  History  of  Commerce :  year  1564 


ENGLAND.  113 

of  English  goods  to  those  countries.  The  English  had  learned 
from  the  Dutch  the  art  and  mystery  of  the  herring  fishery; 
they  were  initiated  hy  the  Basques  in  the  whale  fishery,  and 
both  these  fisheries  had  been  promoted  by  premiums.  James  I. 
had  particularly  at  heart  the  art  of  naval  construction  and  the 
success  of  his  fisheries.  However  ridiculous  the  interminable 
exhortations  to  eat  fish  addressed  by  this  king  to  his  subjects 
appear  to  us,  we  must  do  him  the  justice  to  say  that  he  under 
stood  upon  what  depended  the  future  prosperity  of  the  English 
people.  The  emigration  thither  of  the  manufacturers  expelled 
from  Belgium  and  France  by  Philip  II.  and  Lewis  XIV.,  added 
immensely  to  the  industrial  skill  and  the  manufacturing  capital 
of  England.  To  these  events  she  owes  her  production  of 
fine  woollen  goods,  also  great  success  in  the  manufacture  of  hats, 
glass,  paper,  watches,  linen,  and  silk,  and  a  portion  of  her  skill 
in  metallurgy.  All  these  branches  of  industry  she  learned  how 
to  establish  and  build  up  to  prosperity  by  means  of  prohibitory 
or  high  duties.* 

Great  Britain  borrowed  from  all  the  countries  of  the  conti 
nent  their  special  arts,  and  gave  them  a  home  under  the  shelter 
of  her  protective  system.  Among  other  ornamental  branches 
of  industry  thus  imported,  Venice  found  here  a  rival  in  the 
manufacture  of  glass,  and  Persia  itself,  one  in  that  of  carpets. 

Once  in  possession  of  an  industry,  England  surrounded  it  for 
centuries  with  her  solicitude,  as  a  young  plant  requiring  con 
stant  support  and  attention.  He  who  knows  not  that  by  dint  of 
labor,  skill,  and  economy,  an  industry  becomes  in  the  lapse  of 
time  a  public  advantage;  that  in  a  country  well  advanced  in 
agriculture  and  general  civilization,  new  manufactures  suitably 
protected,  however  imperfect  and  costly  their  products  in  the 
beginning,  may,  by  the  aid  of  experience  and  the  stimulus  of 
domestic  competition,  rival  in  all  respects  the  products  of  older 
factories  in  foreign  countries ;  he  who  knows  not  that  the  pros 
perity  of  any  particular  commodity  is  subordinate  to  that  of 
very  many  others,  and  who  does  not  comprehend  to  what  degree 
a  nation  can  raise  its  productive  power  by  unremitting  care,  that 

*  Anderson's  History  of  Commerce :  year  1685. 
8 


114  HISTORY. 

each  generation  will  pursue  the  work  of  industrial  progress  by 
taking  it  up  where  it  had  been  left  by  its  predecessors,  must 
learn  all  this  by  studying  the  History  of  English  industry ;  a 
study  which  should  precede  the  construction  of  systems,  or  the 
giving  of  advice  to  statesmen  who  hold  in  their  hands  the  destiny 
of  nations. 

In  the  reign  of  George  I.  the  statesmen  of  England  were  fully 
aware  of  the  real  basis  of  the  power  of  their  country.  The  min 
isters  of  that  King  put  in  his  mouth  these  words  at  the  opening 
of  the  parliament  in  1721.  "  It  is  very  obvious  that  nothing 
would  more  conduce  to  the  obtaining  so  public  a  good  than  to 
make  the  exportation  of  our  manufactures  and  the  importation 
of  the  commodities  used  in  the  manufacturing  of  them,  as  prac 
ticable  and  easy  as  may  be."  *  Such  had  been  for  centuries  the 
governing  principle  of  English  commercial  policy;  such  had 
been  previously  that  of  Venice.  It  is  even  now,  as  it  was  in  the 
time  of  Queen  Elizabeth.  The  fruits  which  that  principle  has 
borne  are  visible  to  all.  Theorists  have  since  pretended  that 
England  has  become  rich  and  powerful,  not  on  account,  but  in 
spite  of  her  commercial  policy.  It  might  as  well  be  maintained 
that  a  tree  becomes  stronger  and  more  productive,  not  on 
account,  but  in  spite  of  the  attention  and  helps  which  it  received 
in  its  early  growth. 

The  history  of  England  exhibits  also  the  intimate  relation 
existing  between  politics  and  political  economy.  Evidently  the 
establishment  of  manufactures  in  England  and  the  consequent 
increase  of  population  begot  an  increased  demand  for  salted  fish 
and  pit-coal,  the  use  of  which  begot  an  increase  of  fishing  vessels 
and  enlarged  the  coasting  trade.  The  fisheries  and  coasting  trade 
were  at  first  in  the  hands  of  the  Dutch.  Encouraged  by  high 
duties  and  premiums,  the  English  turned  their  attention  to  fish 
ing.  Their  Act  of  Navigation  secured  to  their  own  vessels  the 
transportation  of  coal  and  the  general  maritime  carrying  trade. 
The  commercial  marine  of  England  increased,  and  her  naval 
power  was  proportionately  extended,  and  this  soon  enabled  her 
to  cope  with  the  Dutch  fleet.  Shortly  after  the  promulgation 

*  Ustaritz :   Theory  and  Practice  of  Commerce,  ch.  xxviii. 


ENGLAND.  115 

of  the  Act  of  Navigation,  a  maritime  war  broke  out  between 
England  and  Holland,  in  which  the  trade  of  the  Dutch  with  the 
countries  on  the  other  side  of  the  Channel,  was  almost  entirely 
broken  up,  and  their  navigation  in  the  Northern  and  Baltic 
Seas  nearly  annihilated  by  English  cruisers.  Hume  estimates 
the  number  of  the  Dutch  vessels  which  fell  into  the  hands  of  the 
English  at  sixteen  hundred,  and  Davenant  affirms,  in  his  work 
on  public  income,  that  twenty  years  after  the  publication  of  the 
Act  of  Navigation  the  commercial  marine  of  England  had 
doubled. 

Among  the   most   remarkable  consequences   of  the  Act  of 
Navigation,  we  may  place  : — 

1.  The  extension  of  the  commerce  of  England  with  all  the 
Northern  States,  with  Germany  and  Belgium,  consisting  in  the 
exportation  of  manufactured  articles  and  in  the  importation  of 
raw  materials,  a  commerce  from  which,  as  we  are  informed  by 
Anderson,  they  had  been  almost  excluded  by  the  Dutch. 

2.  An  extraordinary  development  of  contraband  trade  with 
Spain  and  Portugal  and  their  West  Indian  colonies. 

3.  A  considerable  increase  on  the  part  of  the  English  in  the 
herring  and  whale  fisheries,  of  which  the  Dutch  had  previously 
nearly  a  monopoly. 

4.  The  conquest  by  England  in  1655  of  Jamaica,  the  most 
important  of  the  West  India  colonies,  and  with  it  the  possession 
of  the  trade  in  sugar. 

5.  But  chiefly  the  conclusion  with  Portugal  in  1703  of  the 
treaty  of  Methuen,  of  which  we  shall  have  occasion  to  speak  in 
connection  with  Spain  and  Portugal.     By  this  treaty,  the  Dutch 
and  the  Germans  lost  entirely  an  extensive  trade  with  Portugal 
and  her  colonies.    Portugal  was  rendered  completely  subservient 
to  England,  and  England  was  enabled,  with  the  gold  and  silver 
drawn  from  her  commerce  with  that  country,  to  increase  im 
mensely  her  trade  with  the  East  Indies  and  China,  to  establish, 
at  -a  later  period,  her  vast  empire  in  India,  and  to  expel  the 
Dutch  from  their  principal  positions. 

The  two  results  last  specified  are  very  closely  connected.    The 
art  with  which  the  English  succeeded  in  making  Portugal  and 


HISTORY. 

India  the  instruments  of  their  power  is  particularly  worthy  of 
attention.  Portugal  and  Spain  had  scarcely  any  means  of 
payment  except  the  precious  metals ;  the  East  received  nothing 
in  payment  but  the  precious  metals,  except  cloths.  So  far,  very 
well ;  but  the  East  had  almost  nothing  to  sell  except  silk  and 
cotton  goods,  and  the  importation  of  these  did  not  harmonize 
with  the  English  policy  above  mentioned,  to  import  only  raw 
materials  and  to  export  only  manufactured  products.  What  then 
was  their  course  ?  Were  they  content  with  the  profits  on  the  one 
hand  of  a  trade  in  cloths  with  Portugal,  and  on  the  other  hand 
with  the  trade  in  silk  and  cotton  goods  with  the  East  ?  By  no 
means.  The  English  ministers  looked  farther  than  such  advan 
tages.  Had  they  permitted  the  free  importation  into  England 
of  cotton  and  silk  goods  from  the  Indies,  the  manufactures  of 
cotton  and  silk  in  England  would  have  been  destroyed  at  once. 
India  had  in  her  favor  not  only  the  low  price  of  the  raw  material 
and  cheaper  labor,  but  also  long  practice  and  traditional  dex 
terity  or  skill.  Under  the  system  of  competition,  the  superiority 
was  necessarily  with  India;  but  England  was  not  willing  to 
build  up  manufacturing  establishments  in  Asia,  to  fall  after 
wards  under  their  yoke.  She  aspired  herself  to  commercial 
dominion,  and  comprehended  that  of  two  countries  which  deal 
freely  with  each  other,  that  which  sells  the  product  of  her  own 
manufactories,  gains,  and  governs,  whilst  the  other,  which  ex 
ports  only  agricultural  products,  obeys  and  suffers.*  With  regard 

*  The  nation  which  exports  manufactured  products  is  generally  more 
advanced  in  civilization  than  that  which  produces  only  raw  materials. 
Manufactured  articles  have  a  far  more  extensive  market ;  everybody  uses 
the  latter,  whilst  manufacturers  alone  use  the  former.  But  that  alone 
could  not  ensure  the  superiority  for  which  the  author  contends.  List,  how 
ever,  contradicts  himself  in  speaking  of  England  and  the  United  States. 
He  exhibits  the  first  of  these  powers  as  dependent  upon  the  second,  which 
furnishes  almost  exclusively  the  cotton  she  spins  and  weaves.  The 
domination  in  fact  belongs  to  the  monopoly,  be  it  exercised  by  the  manu 
facturer  or  by  the  producer  of  raw  material. — [H.  R.] 

The  qualification  of  Richelot  is  proper  enough,  but  List  is,  in  the  main, 
right.  In  the  present  state  of  England  and  the  United  States,  they  are 
mutually  dependent  as  regards  cotton.  It  is  notorious,  however,  that 


ENGLAND.  117 

to  her  North  American  colonies,  England  had  already  announced 
the  same  policy,  declaring  that  not  even  a  nail  should  be  manu 
factured  there,  still  less  the  importation  of  nails  manufactured 
in  those  colonies  be  permitted.  How  could  she  then  give  up  to 
a  people  so  numerous,  so  frugal,  and  so  favorably  situated  for 
manufacturing  industry  as  the  Hindoos,  her  internal  market,  the 
very  foundation  of  her  rising  industrial  power. 

England  therefore  prohibited  the  articles  competing  with  those 
of  her  own  factories,  the  silk  and  cotton  goods  of  the  East.* 
This  prohibition  was  absolute  and  under  severe  penalties,  she 
would  not  consume  a  thread  from  India,  and  firmly  rejecting 
these  beautiful  and  cheap  products,  preferred  to  use  the  inferior 
and  dearer  goods  produced  by  her  own  laborers ;  she  sold  the 
cheap  goods  to  the  continental  countries,  —  these  much-desired 
commodities  of  the  East ;  thus  giving  them  the  benefit  of  that 
cheapness  denied  to  her  own  consumers.  Did  England,  in  so 
doing  act  unwisely?  Undoubtedly,  according  to  Adam  Smith 
and  J.  B.  Say,  and  their  theory  of  values.  For,  according  to 
that  theory,  as  she  was  obliged  to  purchase  the  goods  she  needed 
where  they  could  be  had  the  cheapest  and  of  the  best  quality, 
it  was  the  height  of  folly  to  manufacture  and  consume  inferior 
articles  at  a  higher  price,  giving  to  other  countries  the  whole 
benefit  of  the  difference. 

We  hold  to  a  different  theory,  which  we  call  the  theory  of  pro 
ductive  power ;  a  theory  which  the  English  ministers  obeyed, 

England  has  more  agency  in  fixing  the  price  of  cotton  than  the  planters 
who  produce  it.  They  take  what  she  offers,  and  they  have  always  been 
unwilling  that  England  should  have  a  competitor  for  their  cotton.  The 
real  state  of  the  case  is  that  England  now  employs  our  planters  to  produce 
raw  cotton  for  her  factories,  for  which  she  pays  only  that  price  which 
competition  among  her  own  manufacturers  fixes.  England  governs  the 
price  and  the  quantity.  At  the  same  time  she  is  stimulating  the  production 
elsewhere.  There  will  be  cotton  produced  for  the'  English  factories  in 
other  countries  long  before  there  will  be  another  England  to  bid  for  our 
cotton.  If  the  cotton-planters  had  been  as  clear-sighted  in  commercial 
matters  as  the  English  rulers,  there  would  now  be  as  much  or  more  cotton 
manufactured  in  the  United  States  than  in  England.  —  S.  C. 
*  Anderson :  year  1720. 


118  HISTORY. 

without  fully  comprehending,  when  they  determined  upon  their 
industrial  policy :  to  buy  raw  materials,  and  sell  manufactured 
products.  The  English  ministers  thought  it  less  important  to 
purchase  perishable  goods  at  a  low  price,  than  to  establish,  at 
some  sacrifice,  a  durable  manufacturing  power. 

Their  policy  has  been  attended  with  the  most  splendid  success. 
England  now  produces  cotton  and  silk  goods  to  the  value  of 
seventy  millions  of  pounds ;  she  supplies  largely  the  markets  of 
Europe,  and  all  the  world  :  even  India  now  receives  the  products 
of  English  labor.  Her  own  production  is  now  from  fifty  to  a 
hundred  times  greater  than  her  former  commerce  in  the  manu 
factured  articles  of  India. 

What  would  have  been  her  condition,  had  she  purchased  for 
these  last  hundred  years  the  cheap  goods  of  India  ?  What  have 
those  people  gained  who  purchased  these  cheap  goods  ?  The 
English  have  acquired  power,  an  immense  power ;  the  contrary 
has  been  the  lot  of  the  consumers  of  the  cheap  goods. 

How  Adam  Smith,  against  the  evidence  of  such  results,  could 
hold  unshaken  the  opinion  he  expresses  upon  the  Navigation  Act, 
is  difficult  to  explain.  It  is  perhaps  only  to  be  referred,  as  we 
shall  explain  in  a  subsequent  chapter,  to  his  hatred  of  com 
mercial  restrictions  in  general.  These  results  were  opposed  to 
his  favorite  idea  of  unlimited  free  trade ;  he  was  obliged,  conse 
quently,  to  obviate  the  objections  which  the  results  of  the  Navi 
gation  Act  furnished  against  his  principle,  by  distinguishing  the 
political  from  the  economical  object,  and  by  maintaining  that 
politically  speaking,  the  Navigation  Act  was  necessary  and 
useful,  but  economically,  prejudicial  and  hurtful.  According  to 
the  view  of  this  subject  which  we  have  presented,  neither  the 
nature  of  things  nor  experience  justify  any  such  distinction. 
Without  being  enlightened,  as  he  ought  to  have  been,  by  the 
experience  of  North  America,  J.  B.  Say,  upon  this  topic,  as 
upon  all  others  where  liberal  and  restrictive  principles  came 
in  question,  goes  even  beyond  his  predecessor.  He  calcu 
lates  the  wages  in  France  of  a  sailor,  in  consequence  of  the 
premium  enjoyed  by  the  fisheries,  with  the  view  of  proving  the 
absurdity  of  premiums.  The  subject  of  restrictions  upon  foreign 
navigation  is  generally  a  stumbling-block  to  the  champions  of 


ENGLAND.  119 

absolute  free  trade ;  they  pass  over  it  in  silence,  especially  if 
connected  with  the  commerce  of  maritime  cities. 

The  truth  is,  that  it  is  with  a  commercial  marine  as  with  com 
merce.  Free  navigation  and  free  trade  are  of  advantage  to 
nations  in  thfe  earlier  stages  of  their  existence,  and  before  they 
have  sufficiently  advanced  in  their  agriculture  and  manufacturing 
industry.  For  want  of  capital  and  skilful  navigators,  such 
nations  willingly  surrender  the  business  of  maritime  transporta 
tion  and  foreign  trade.  In  a  more  advanced  stage  of  their  pro 
gress,  when  they  have  developed  in  a  good  degree  their  produc 
tive  power,  and  when  they  have  made  progress  in  the  arts  of 
naval  construction  and  navigation,  the  desire  is  felt  of  extending 
their  foreign  commerce,  of  employing  their  own  vessels,  and  of 
becoming  a  maritime  power.  By  degrees  the  mercantile  marine 
acquires  sufficient  importance  to  suggest  the  idea  of  excluding 
foreign  vessels  from  their  carrying  trade,  and  of  transporting 
their  own  goods  to  the  most  distant  ports  in  their  own  ships. 

The  moment  has  then  arrived  to  have  recourse  with  advantage 
to  restrictions  for  the  purpose  of  excluding  from  this  shipping 
business,  rich,  experienced,  and  powerful  foreigners.  But  when 
the  merchant  marine  and  maritime  power  have  reached  their 
height,  a  new  epoch  commences,  in  reference  to  which  Dr. 
Priestley  says,  it  would  be  as  politic  to  abolish  all  impediments 
to  navigation  as  it  had  been,  in  the  first  place,  to  establish  them. 
By  treaties  of  navigation  upon  the  basis  of  equality,  very  im 
portant  advantages  may  be  secured  in  the  trade  with  nations  less 
advanced,  preventing  them,  on  the  one  hand,  from  resorting 
to  restrictions  in  their  own  interest ;  and  on  the  other,  preventing 
more  advanced  people  from  inaction,  by  stimulating  in  every  way 
the  arts  of  naval  construction  and  navigation.*  Venice,  in  her 

*  It  is  this  policy  which  England  has  just  adopted  by  the  Act  of  June 
2G,  1849,  which  repeals,  with  some  reservations,  the  Navigation  Act,  and 
reduces  materially  the  rigors  of  her  former  laws  of  navigation.  However 
remarkable  the  superiority  to  which  the  English  marine  attained  under  this 
protection,  it  is  a  striking  confirmation  of  List's  doctrine,  that  it  became 
necessary  to  withdraw  protection  to  secure  that  degree  of  competition  which 
would  ensure  a  continuance  of  that  superiority  which  was  actually  threat 
ened  by  a  sense  of  false  security.  This  change  of  policy  became  one  of 
urgent  necessity. — [H.  R.} 


120  HISTORY. 

period  of  development,  was,  no  doubt,  greatly  indebted  to  her 
maritime  restrictions ;  having  reached  supremacy  in  commerce, 
industry,  and  navigation,  she  was  unwise  to  maintain  them.  In 
this  way  she  was  surpassed  in  the  arts  of  naval  construction 
and  navigation,  in  the  aptitude  of  her  seamen,  by  various  mari 
time  and  commercial  nations  which  sprang  up  around  her.  By 
her  policy  England  has  increased  her  maritime  power ;  by  this 
same  policy  she  has  augmented  her  industrial  and  commercial 
resources,  and  this  augmentation,  in  its  turn,  begot  an  enlarge 
ment  of  her  maritime  and  colonial  power. 

Although  Adam  Smith  maintains  that,  commercially  speaking, 
the  Navigation  Act  has  not  been  advantageous  to  England,  he 
admits  that  it  has  increased  her  power,  and  that  power  is  more 
important  than  wealth.* 

It  is  true  that  power  is  more  important  than  wealth.  But 
why  ?  Because  power  is  for  a  country  a  faculty  of  employing 
new  means  of  production,  it  is  the  productive  power  of  the  tree 
upon  which  wealth  grows,  because  the  tree  which  bears  the  fruit 
is  of  more  value  than  the  fruit  itself.  Power  is  of  greater  im 
portance  than  wealth,  because  by  the  aid  of  power  a  country 
not  only  acquires  new  modes  of  production,  but  retains  and 
secures  old  advantages  and  the  enjoyment  of  wealth  already 
acquired ;  and  because  weakness  or  the  want  of  power  leaves  all 
that  a  nation  values  at  the  mercy  of  more  powerful  rivals  —  its 
wealth,  its  productive  power  itself,  its  civilization,  its  liberty, 
even  its  national  independence.  The  history  of  the  Italian 
Republics,  of  the  Hanseatic  League  in  Belgium  and  Holland,  as 
well  as  that  of  Spain  and  Portugal,  furnish  ample  proof. 

How  could  Adam  Smith,  in  the  face  of  this  reciprocal  action 
of  political  power,  productive  power,  and  wealth,  maintain  that 
the  treaty  of  Methuen  and  the  Navigation  Act  had  not  been 
commercially  advantageous  to  England  ? 

We  have  shown  how  England,  by  her  policy,  acquired  political 
power  ;  by  power,  productive  force ;  by  productive  force,  wealth ; 
we  are  now  going  to  see  how,  by  this  policy,  she  added  power 
to  power,  and  productive  force  to  productive  force. 

*  Adam  Smith  speaks  of  the  safety  of  the  state,  and  not  of  its  power.  — 
[H.  R.] 


ENGLAND.  121 

i  / 

England  had  in  her  hands  the  keys  of  every  sea ;  she  holds  a 
check  upon  every  nation,  upon  Germany  by  Heligoland,  upon 
France  by  Guernsey  and  Jersey,  upon  North  America  by  Nova 
Scotia  and  the  Bermudas ;  upon  Central  America  by  Jamaica ; 
upon  all  the  coasts  of  the  Mediterranean  by  Gibraltar,  Malta, 
and  the  Ionian  Islands ;  she  possesses  all  the  stopping  places 
upon  the  two  routes  to  India,  except  the  Isthmus/of  Suez,  upon 
which  her  covetous  eyes  are  now  fixed ;  she  shuts  the  Mediter 
ranean  by  Gibraltar,  the  Red  Sea  by  Aden,  the  Persian  Gulf 
by  Busheer  and  Karak.  She  needs  only  the  Dardanelles,  the 
Sound,  the  Isthmus  of  Suez,  and  Panama,  to  open  and  shut  at 
her  pleasure  every  sea  and  every  maritime  route. 

Her  ships  of  war  exceed  those  of  all  other  nations  together, 
if  not  in  number,  at  least  in  the  skill  and  efficiency  with  which 
they  are  managed. 

Her  manufacturing  industry  also  surpasses  in  importance  that 
of  all  other  countries.  Since  James  I.  the  production  of  cloths 
has  increased  nearly  six  fold,  having  reached  a  value  of  twenty-six 
millions  sterling.  Another  branch  of  industry  by  which  she  has 
been  enriched  during  the  last  half  century,  that  of  cotton,  is  still 
more  important,  its  value  at  present  being  forty-five  millions. 

Not  satisfied  with  these  results,  she  is  on  the  eve  of  carrying 
to  the  same  figure,  if  not  higher,  the  production  of  linens,  a 
branch  of  industry  in  which  she  had  been  hitherto  surpassed 
by  other  countries ;  it  has  already  reached  the  aggregate  of 
twelve  and  a  half  millions.  England,  in  the  fourteenth  century 
so  destitute  of  iron  that  it  was  deemed  necessary  to  prohibit  the 
exportation  of  this  indispensable  metal,  manufactures  in  the 
nineteenth  century  a  greater  quantity  of  iron  and  a  larger 
variety  of  articles  of  iron  and  steel,  than  all  other  countries  of  the 
world,  the  value  being  not  less  than  eighteen  millions  sterling. 
She  takes  from  her  own  mines  to  the  value  of  not  less  than  thirty- 
six  millions  in  coal  and  other  minerals.  The  two  sums  amount  to 
more  than  seven  times  the  value  of  the  total  production  of  gold  and 
silver  throughout  the  world,  which  is  only  about  forty-one  millions 
of  dollars.* 

*  The  present  production  is  nearly  four  times  this  sum.  —  S.  C. 


122  HISTORY. 

England  now  produces  silk  goods  to  the  value  of  more  than 
ten  millions  sterling,  a  product  greater  than  that  of  all  the 
Itdlian  Republics  of  the  Middle  Ages  together. 

Branches  of  industry,  the  names  of  which  were  scarcely  known 
in  the  time  of  Henry  VIII.  and  Elizabeth,  produce  now  yearly 
enormous  sums ;  for  instance,  five  millions  of  pounds  from  the 
fabrication  of  earthern  or  queensware ;  one  million  seven  hun 
dred  thousand  pounds  from  that  of  copper  and  tin;  fourteen 
million  pounds  from  that  of  paper,  books,  colors,  and  furniture ; 
sixteen  million  pounds  from  leather,  and  sixteen  million  pounds 
from  other  articles ;  the  manufacture  of  beer  and  spirits  far 
exceeds  in  value  the  whole  products  of  .the  country  in  the  time 
of  James  I. 

The  whole  product  of  the  manufacturing  industry  of  the  three 
kingdoms  has  been  recently  estimated  at  one  hundred  and 
eighty-seven  million  one  hundred  thousand  pounds. 

In  consequence,  chiefly,  of  this  enormous  product  of  manufac 
tures,  the  productive  energy  of  agriculture  has  been  increased 
to  a  total  value  of  two  hundred  and  eighty-five  millions  of 
pounds. 

England  is  undoubtedly  indebted  for  this  increase  of  political 
and  productive  power,  not  only  to  her  commercial  restrictions, 
to  her  Navigation  Act,  to  her  treaties  of  commerce,  but  in  a 
large  degree  to  her  parallel  progress  in  the  domain  of  science 
and  art. 

Hence,  is  it  not  a  fact  that  a  million  of  English  workmen 
accomplish  at  the  present  day  the  work  of  one  hundred  millions 
of  men  ?  The  great  demand  for  her  manufactured  articles  which 
the  prudent  and  vigorous  policy  of  England  has  excited  in  foreign 
countries,  and  especially  in  her  colonies,  the  wise  and  energetic 
protection  which  she  has  always  granted  to  her  industry,  the 
ample  encouragement  afforded  by  her  patent  laws  to  inventors, 
the  extraordinary  development  of  her  means  of  transport,  her 
roads,  canals,  and  railways ;  such  are  the  causes  of  that  prodigy. 

England  has  shown  to  the  world  .how  powerfully  the  means 
of  transport  control  the  increase  of  wealth,  population,  and  po 
litical  power ;  she  has  shown  what  a  free,  industrious,  and  well- 


ENGLAND.  123 

governed  nation  in  times  of  war,  and  in  the  short  space  of  half 
a  century,  is  able  to  accomplish  in  this  line.  The  achievements  in 
this  respect  of  the  Italian  republics,  were  in  comparison  but  child's 
play.  The  sums  applied  in  England  to  these  great  instruments 
of  national  production,  have  been  estimated  at  one  hundred 
and  eighteen  millions  of  pounds.* 

But  England  did  not  undertake  these  works  until  her  manu 
facturing  industry  had  attained  some  vigor.  It  has  since  become 
obvious  to  all  that  such  works  can  only  be  achieved  by  a  nation, 
the  industry  of  which  begins  to  be  developed  upon  a  large  scale ; 
that  those  expensive  instruments  are  worth  the  expenditure  they 
occasion  only  in  a  country  where  industry  and  agriculture  grow 
up  together :  in  such  a  country  alone  do  they  perform  adequately 
their  functions. 

Of  course  the  extraordinary  productive  power  and  the  colossal 
wealth  of  England,  are  not  the  result  merely  of  the  material 
power  of  the  nation  and  of  the  labor  of  individuals.  The 
primitive  sentiment  of  liberty  and  personal  rights,  the  energy, 
the  religious  feeling  and  the  morality  of  the  people,  have  all 
co-operated  in  it ;  the  political  constitution,  the  institutions,  the 
wisdom  and  vigor  of  the  government  and  the  aristocracy  have 
also  had  their  part  in  it  as  well  as  the  geographical  situation, 
the  destiny  of  the  country,  and  some  fortunate  accidents. 

It  is  difficult  to  decide  whether  physical  power  exerts  more 
influence  over  moral  power,  or  the  latter  over  the  former ; 
whether  social  power  exerts  a  greater  influence  over  individual 
power,  or  the  latter  over  the  former.  It  is  ever  true,  however, 
that  they  exert  mutually  an  energetic  influence ;  that  the  de 
velopment  of  the  one  is  favorable  to  the  other,  and  that  neither 
can  suffer  without  the  other  suffering  at  the  same  time. 

Let  those  who  seek  for  the  origin  of  English  power  exclusively 
in  the  mixture  of  the  Anglo-Saxon  and  Norman  races,  cast  a 
glance  at  the  state  of  that  country  before  Edward  III.  Where 
then  was  that  labor  and  economy  ?  Let  those  who  seek  it  in 
constitutional  liberty,  remember  how  Henry  VIII.  and  Elizabeth 

*  Among  these  causes  the  use  of  steam  and  the  immense  improvements 
in  tools  and  machinery,  should  always  find  a  chief  place.  —  S.  C. 


124  HISTORY. 

treated  their  parliaments.  Where  then  was  this  constitutional 
liberty  ?  At  that  time  individuals  of  the  cities  of  Germany  and 
Italy  enjoyed  a  far  higher  degree  of  liberty  than  citizens  of 
England. 

Among  other  nations  of  German  origin,  the  Anglo-Norman 
branch  had  furnished  but  one  plant  of  liberty,  the  Jury ;  it  was 
the  germ  of  the  sentiment  of  liberty  and  individual  rights 
among  the  English  people.  When  the  Pandects  were  exhumed 
in  Italy,  when  this  great  body  of  long-buried  Roman  wisdom 
•was  brought  to  light,  and  had  spread  the  pestilence  of  law  over 
all  the  continent,  the  English  barons  refused  to  be  inoculated, 
rejected  the  boon  of  Roman  Law>  and  adhered  to  their  own 
English  system  of  legal  polity.  What  a  treasure  of  moral 
power  they  thus  secured  for  their  posterity  !  And  how  greatly 
has  this  power  reacted  since  upon  the  material  production  of 
England  ! 

The  Latin  language  has  long  been  excluded  in  England  from 
society,  from  literature,  from  public  affairs,  and  from  the  tribunals 
of  justice ;  what  an  influence  must  that  exclusion  have  had  upon  the 
development  of  the  nation,  upon  its  legislation,  upon  its  justice, 
upon  its  literature,  and  its  industry  !  What  then  has  prolonged 
in  Germany  the  use  of  that  language,  and  the  authority  of  those 
foreign  laws  ?  What  then  has  prolonged  its  use  in  Hungary  to 
the  present  hour  ? 

What  influence  has  the  invention  of  gunpowder,  of  printing, 
the  Reformation,  the  discovery  of  the  new  routes  to  India  and 
America,  had  upon  the  liberty,  the  civilization,  and  the  industry 
of  England !  Study  and  compare  the  effects  of  these  events 
upon  Germany  and  France.  In  Germany  we  find  divisions  in 
the  'Empire,  in  the  provinces,  and  within  the  very  walls  of  the 
cities,  miserable  controversies,  barbarism  in  literature,  in  the 
public  administration,  and  in  the  tribunals  of  justice,  civil  war, 
persecution  and  banishment,  foreign  invasions,  a  depopulated 
and  devastated  country,  the  ruin  of  cities,  of  industry,  of  agri 
culture,  of  commerce,  the  fall  of  liberty  and  of  civil  institutions, 
the  sovereignty  of  the  high  aristocracy ;  the  destruction  of  im 
perial  authority  and  of  nationality ;  the  severance  and  loss  of 


ENGLAND.  125 

the  most  beautiful  part  of  the  empire.  In  France,  we  find  the 
subjection  of  cities  and  the  aristocracy  to  absolutism,  the  alliance 
of  the  latter  with  the  priesthood  against  liberty,  though  not  against 
national  unity  and  power ;  conquest  with  its  profits  and  its  evils, 
the  loss  of  liberty  and  the  ruin  of  industry.  England  exhibits, 
on  the  other  hand,  the  prosperity  of  her  cities;  the  progress  of 
her  agriculture,  her  commerce,  and  her  arts ;  the  submission  of 
her  aristocracy  to  law  —  an  aristocracy  permitted  to  take  the 
lead  in  legislation,  in  government,  in  the  administration  of  jus 
tice,  and  in  the  profits  of  industry ;  development  at  home,  ag 
grandizement  abroad,  peace  within,  influence  without,  over 
countries  of  less  advanced  culture ;  limits  to  royal  authority,  but 
with  advantage  to  the  crown,  its  income,  its  splendor,  and  its 
duration  ;  finally,  a  high  degree  of  prosperity,  civilization,  and 
liberty  within,  and  an  overwhelming  power  abroad. 

Who  can  tell  the  part  which,  in  these  splendid  results,  is  to 
be  attributed  to  national  spirit  and  to  the  constitution ;  that 
which  belongs  to  the  geographical  position  and  the  influence  of 
the  past,  and  that  which  pertains  to  change,  destiny,  or  to  good 
fortune. 

Substitute  Henry  VIII.  for  Charles  V.,  and  by  virtue  of  a 
disgraceful  trial  for  divorce,  Germany  and  the  Netherlands 
might  have  had,  perhaps,  (it  will  be  understood  why  we  say 
perhaps,)  the  fortune  of  England,  and  England  the  fate  of 
Spain ;  substitute  for  Elizabeth  the  weak  and  cruel  Mary,  who 
took  Philip  II.  for  her  husband,  and  what  would  have  become 
of  the  power,  culture,  and  liberty  of  Great  Britain  ? 

If  the  genius  of  the  people  had  prevailed  in  that  revolution, 
the  best  part  of  its  benefits  ought  to  have  fallen  to  the  lot  of 
the  Germans,  who  were  its  authors.  But  of  that  harvest  they 
have  reaped  nothing  but  misfortune  and  weakness. 

In  no  state  of  Europe  has  the  institution  of  the  nobility  been 
so  wisely  adjusted  as  in  England,  securing  to  the  aristocracy,  in 
reference  to  the  crown  and  to  the  commons,  independence,  dig 
nity,  and  duration ;  procuring  for  it  parliamentary  training  and 
experience,  giving  to  its  efforts  a  patriotic  and  national  direction, 
recruiting  it  from  the  elite  of  the  middle  class,  absorbing  all 


126  HISTORY. 

from  its  ranks  who  become  distinguished  by  intelligence,  by 
great  opulence,  or  by  splendid  services,  casting  back  into  it,  on 
the  other  hand,  the  surplus  of  its  increase,  so  that  the  blood  of 
commoners  and  nobility  mingle  in  the  descending  generations. 
The  nobility  receives  constantly  from  the  middle  class  a  new 
infusion  of  civil  and  patriotic  activity,  light,  instruction,  intelli 
gence,  and  wealth ;  whilst  it  gives  back  to  it  a  portion  of  its 
polite  culture  and  mental  independence,  and  abandons  its  younger 
sons  to  their  personal  resources ;  thus  in  many  ways  stimulating 
the  middle  class  to  raise  themselves  to  distinction. 

At  the  house  of  an  English  lord,  whatever  may  be  the  num 
ber  of  his  children,  there  is  but  a  single  noble  at  his  table  ;  the 
others  are  but  common  people,  having  a  liberal  profession, 
serving  the  state,  or  devoting  themselves  to  commerce,  industry, 
or  agriculture.  It  is  said  of  one  of  the  first  Dukes  of  England, 
that  he  conceived  the  idea  a  short  time  since  of  inviting  all  his 
relatives  to  a  festival,  but  that  he  renounced  his  design  on  finding 
that  he  would  be  obliged  to  convene  quite  a  legion,  though  his 
genealogy  did  not  extend  beyond  a  few  centuries.  It  would 
require  a  volume  to  exhibit  fully  the  effects  of  this  institution 
upon  the  spirit  of  enterprise  and  of  colonization,  upon  the  political 
power  and  liberty,  and  generally  upon  the  productive  energy 
of  the  country. 

The  geographical  position  of  England  has  also  had  consider 
able  influence  on  the  original  development  of  the  nation.  With 
regard  to  Europe,  England  has  always  been  a  world  by  itself; 
she  was  always  sheltered  from  the  jealousy,  the  prejudices,  the 
selfishness,  the  passions,  and  the  calamities  of  other  nations.  It 
is  to  this  insular  position  that  she  is  indebted  in  good  part  for 
the  free  and  pure  development  of  her  constitution ;  and  also  for  the 
prompt  success  of  the  Reformation,  the  secularization  of  Church 
properties,  so  advantageous  to-  her  industry ;  and  she  is  indebted 
to  it  for  a  peace  uninterrupted  during  several  centuries,  excepting 
a  very  brief  period  of  civil  war.  Owing  to  this  isolated  condition 
she  has  been  enabled  to  dispense  with  large  standing  armies, 
and  to  organize  at  an  early  day  a  regular  system  of  customs. 

Owing  to  this  advantage  England  has  not  only  escaped  the 


ENGLAND.  127 

disastrous  effects  of  the  continental  wars,  but  she  has  derived 
from  those  wars  immense  benefits  and  helps  towards  her  manu 
facturing  ascendency ;  the  ravages  of  war  injured  in  many  ways 
the  manufacturing  industry  of  the  countries  where  they  occurred ; 
indirectly  by  the  interruption  of  labor  and  the  disasters  brought 
upon  agriculture,  by  which  farmers  were  deprived  of  the  means  of 
buying  manufactured  products,  and  prevented  from  furnishing 
manufacturers  with  raw  materials  and  food ;  then  directly,  either 
by  destroying  a  great  number  of  manufacturers  or  by  cutting  off  the 
supply  of  their  raw  materials  and  preventing  the  export  of  their 
products,  or  by  putting  it  out  of  their  power  to  find  capital  or 
to  employ  workmen,  owing  to  extraordinary  contributions  to 
which  they  were  subjected.  The  injuries  of  war  are  not  at  an 
end  even  when  peace  arrives,  for  capital  and  labor  are  withdrawn 
from  manufactures  and  applied  to  agriculture,  in  proportion  as 
the  latter  has  suffered  from  war ;  and  because  it  promises  on 
that  account  larger  profits  at  the  return  of  peace.  Whilst  Ger 
many  encountered  such  a  state  of  things  several  times  in  a  cen 
tury,  to  the  detriment  of  her  manufactures,  English  industry 
advanced  without  any  prolonged  interruption.  In  comparison 
with  the  manufactures  of  the  continent,  those  of  England  were 
immensely  favored  whenever  she  engaged  in  foreign  wars, 
by  the  fitting  out  of  her  fleets  and  armies,  or  by  subsidies,  or 
in  both  ways  at  once. 

We  are  not  of  those  who  defend  useless  expenditures,  particu 
larly  those  occasioned  by  war  or  the  keeping  of  great  armies, 
nor  of  those  who  maintain  the  absolute  utility  of  a  considerable 
public  debt ;  but  we  do  not  concede  the  correctness  of  the  pre 
vailing  theory  which  regards  as  absolutely  injurious  that  con 
sumption  which  is  not  directly  reproductive ;  as,  for  instance, 
that  of  war.  Military  preparations,  wars,  and  the  debts  which 
they  involve,  may  in  certain  cases,  as  is  shown  in  the  case  of 
England,  contribute  immensely  to  increase  the  productive  powers 
of  a  country.  Material  capital  can  be  consumed  unproductively 
in  the  strict  meaning  of  the  term,  and  yet  such  consumption 
may  excite  extraordinary  industrial  efforts,  new  inventions,  im 
provements,  and  thus,  in  a  general  way,  increase  productive 


128  HISTORY. 

power.  That  power  is  something  durable ;  it  continues  to  in 
crease  whilst  the  expenses  of  war  come  to  an  end.  And  thus  it 
may  happen  in  favorable  circumstances,  such  as  have  occurred 
in  England,  that  a  nation  gains  vastly  more  than  it  loses  by  that 
kind  of  consumption  which  men  of  theory  consider  as  unproduc 
tive.  This  fact  is  clearly  shown  in  England,  where,  during  the 
war,  immense  progress  was  made  in  the  manufacture  of  cotton ; 
a  productive  power  being  thus  attained  which  yielded  annually 
a  sum  of  values  far  exceeding  the  interest  which  that  country 
pays  for  its  increase  of  debt,  without  speaking  of  the  vast 
development  of  other  branches  of  industry  or  of  the  increase 
of  her  colonial  wealth. 

Whether  England  kept  armies  upon  the  continent,  or  whether 
she  furnished  'subsidies  for  continental  wars,  her  manufacturing 
industry  enjoyed  manifest  advantages.  The  whole  of  the  war 
expenditure  was  carried,  in  the  form  of  manufactured  articles, 
to  the  theatre  of  war,  where  such  importations  contributed  power 
fully  to  ruin  the  foreign  manufacturers,  already  in  extremities, 
and  to  secure  for  ever  the  external  market  for  English  manufac 
turers  ;  it  operated  like  a  premium  upon  exports  in  favor  of 
English,  and  to  the  detriment  of  foreign,  manufactures. 

Continental  industry  always  suffered  more  from  alliance  with, 
than  from  the  enmity  of,  England.  For  proof  of  this,  I  refer 
to  the  state  of  things  on  the  continent  during  the  seven  years' 
war,  and  the  wars  of  the  French  Revolution,  and  those  of  the 
Empire. 

Great  as  the  advantages  were  in  these  periods,  they  were  sur 
passed  by  those  which  England  derived  from  immigration, 
advantages  for  which  she  was  indebted  to  her  political,  religious, 
and  geographical  position.  As  early  as  the  twelfth  century, 
political  troubles  drove  the  Flemish  weavers  into  Wales.  Some 
centuries  after,  Italian  exiles  found  their  way  to  London  to  deal 
in  money  and  exchange.  It  has  been  seen  in  our  second  chapter, 
that  at  several  epochs  manufacturers  of  Flanders  and  Brabant 
emigrated  to  England  in  masses.  From  Spain  and  Portugal 
went  persecuted  Jews;  from  the  Hanseatic  cities  and  Venice, 
when  in  a  state  of  decay,  went  merchants  with  their  vessels, 


SPAIN    AND    PORTUGAL.  129 

their  commercial  knowledge,  their  capital,  and  their  spirit  of 
enterprise.  But  still  more  important  were  the  accessions  to 
English  industry  from  the  influx  of  manufacturers  caused  by 
the  Reformation  and  the  religious  persecutions  of  Spain,  Por 
tugal,  France,  Belgium,  Germany,  and  Italy;  then  from  the 
merchants  and  manufacturers  of  Holland,  caused  by  the  com 
mercial  and  industrial  stagnation  produced  there  by  the  Act  of 
Navigation  and  the  Treaty  of  Methuen.  Every  political  move 
ment,  every  continental  war,  drove  multitudes  of  men  of  capital 
and  talents  into  England,  as  to  the  only  country  in  which  they 
could  enjoy  the  privileges  of  liberty,  a  safe  asylum,  domestic 
tranquillity,  peace,  legal  security,  and  prosperity.  More  recently 
the  French  Revolution  and  the  imperial  wars  had  the  same 
result,  and  so  also  the  political  troubles,  reactionary  or  revolu 
tionary,  of  Spain,  Mexico,  and  Southern  America.  For  a  long 
time  England  has  secured  by  Patent  Laws  a  large  share  of  the 
inventive  genius  of  all  countries.  It  is  but  just,  that  after 
having  reached  at  this  day  the  height  of  her  industrial  develop 
ment,  she  should  restore  to  the  nations  of  the  continent  some 
portion  of  the  productive  power  which  she  has  borrowed  from 
them.  • 


CHAPTER  V. 
SPAIN  AND  PORTUGAL. 

WHILST  the  English  were  occupied  during  centuries  in  con 
structing  upon  a  solid  foundation  the  edifice  of  their  natio  al 
prosperity,  the  Spaniards  and  Portuguese  were  indebted  for 
their  rapid  and  great  fortune  to  their  maritime  discoveries.  But  it 
proved  only  the  wealth  of  spendthrifts  of  the  highest  prize 
in  the  lottery,  whilst  the  wealth  of  England  was  like  that 
of  an  industrious  and  economical  father.  By  his  expenditure 
and  by  his  luxury,  the  former  may,  for  a  time,  become  the  object 
of  envy,  but  his  riches  are  wasted  in  prodigalities,  in  pleasures 
9 


130  HISTORY. 

of  the   moment,  whilst   the  other  finds  in  wealth  an  effectual 
means  of  securing  the  moral  and  material  well-being  of  his  latest 

posterity. 

The  Spaniards  possessed,  at  an  early  day,  large  flocks  of 
sheep ;  we  are  informed  that  Henry  L,  of  England,  as  far  hack 
as  1172,  was  inclined  to  prohibit  the  importation  of  Spanish 
wools,  and  that  since  the  tenth  and  eleventh  centuries  the  wool 
len  manufactures  of  Italy  drew  from  Spain  the  chief  part  of  their 
raw  material.  Two  centuries  before  the  inhabitants  along  the 
coast  of  the  Gulf  of  Gascony  had  distinguished  themselves  by 
the  manufacture  of  iron,  by  their  skill  in  navigation  and  in  the 
whale  fishery ;  in  1619  they  were  still  so  superior  to  the  English 
that  the  latter  sent  fishermen  thither  to  increase  their  skill  in 
that  branch  of  industry.* 

In  the  tenth  century,  under  Abdulrahman  III.,  from  the  year 
912  to  950,  the  Moors  cultivated  in  the  fertile  plains  of  Valencia 
vast  plantations  of  cotton,  sugar,  and  rice,  and  were  producers, 
to  some  extent,  of  silk.f  Cordova,  Seville,  and  Granada  had 
also  in  the  time  of  the  Moors  considerable  manufactures  of  cotton 
and  silk. 

Valencia,  Segovia,  Toledo,  and  many  other  cities  of  Castile 
were  distinguished  by  their  manufactures  of  wool.  Seville  alone 
numbered  sixteen  thousand  looms,  and  the  woollen  manufactures 
of  Segovia  employed  thirteen  thousand  workmen  in  1552.  Other 
branches  of  industry,  especially  the  manufacture  of  arms  and 
paper,  were  developed  in  the  same  proportion.  Down  to  the 
time  of  Colbert  the  French  received  their  fine  cloths  from  Spain.  J 
The  sea-ports  of  that  country  were  animated  by  extended  com 
merce  and  an  active  maritime  fishery ;  and  down  to  Philip  II. 
her  marine  surpassed  that  of  any  other  nation.^ In  a  word,  Spain 
possessed  all  the  elements  of  power  and  prosperity  until  religious 
fanaticism  conspired  with  despotism  to  extinguish  the  genius  of 
the  nation.  That  work  of  darkness  was  commenced  by  the  ex- 

*  Anderson,  vol.  i.,  page  127 ;  vol.  ii.,  page  350. 

f  Simon:  Recueil  d'Observations sur  L'Angleterre.  Ustaritz:  Theorie  et 
de  pratique  du  Commerce. 

I  Chaptal  d'Industrie  Francaise :  vol.  ii. 


SPAIN    AND     PORTUGAL.  131 

pulsion  of  the  Jews,  and  terminated  by  that  of  the  Moors ;  two 
millions  of  the  most  industrious  and  the  richest  of  her  inhabitants 
were  thus  thrust  out  of  Spain  with  their  capital.  Whilst  the 
inquisition  thus  applied  itself  to  banish  national  industry,  it 
exerted  itself  with  equal  success  in  preventing  the  establishment 
in  Spain  of  foreign  manufacturers  J 

The  discovery  of  North  America  and  of  the  route  to  India  by 
the  Cape  of  Good  Hope  increased  only  in  appearance,  and  for 
a  time,  the  wealth  of  Spain  and  Portugal.  Their  industry 
and  power  received  from  it  at  last  a  death-blow.  For,  instead 
of  receiving  the  products  of  the  two  Indies  in  exchange  for  their 
own  manufactures,  as  did  Holland  and  England  at  a  later  period, 
they  bought  goods  manufactured  in  foreign  countries  with  gold 
and  silver  extorted  from  their  colonies,  they  transformed  useful 
and  industrious  citizens  into  overseers  of  slaves  and  colonial 
tyrants ;  they  stimulated  the  industry,  commerce,  and  navigation 
of  Holland  and  England,  awakening  rivals  who  soon  became  pow 
erful  enough  to  destroy  their  fleet  and  to  wrest  from  them  the 
sources  of  their  opulence.  The  kings  of  Spain  in  vain  prohibited 
the  exportation  of  money  and  the  importation  of  manufactures ; 
the  spirit  of  enterprise,  the  love  of  labor  and  commerce  take 
deep  root  only  in  the  soil  of  political  and  religious  liberty ;  gold 
and  silver  stay  only  where  industry  attracts  and  employs  them. 

Portugal,  however,  under  a  skilful  and  an  energetic  minister 
made  progress  in  manufactures  and  industry,  the  first  results  of 
which  astonish  us.  That  country,  like  Spain,  was  the  immemorial 
possessor  of  large  flocks  of  sheep.  Strabo  relates  that  a  fine  breed 
of  sheep  had  been  introduced  there  from  Asia,  and  that  a  single 
sheep  was  sold  as  high  as  one  talent.  In  1681,  when  Count 
Ereceira  came  to  the  ministry,  he  conceived  the  project  of  es 
tablishing  in  the  country  manufactures  of  cloth,  with  the  view 
of  using  their  own  wool  and  thus  supplying  Portugal  and  her 
colonies.  For  this  purpose  manufacturers  of  woollen  cloth  were 
brought  over  from  England,  and  through  the  encouragement 
given  them,  the  manufacture  took  root  so  quickly  that,  at  the 
end  of  three  years,  1684,  they  were  able  to  prohibit  the  impor 
tation  of  foreign  cloth.  From  that  moment  Portugal,  from  her 


132  HISTORY. 

own  stock  of  wool,  supplied  her  own  consumption  of  cloth;  and, 
according  to  the  report  of  an  English  writer,  her  industry 
flourished  for  nineteen  years.*  The  English,  in  this  instance, 
gave  early  proof  of  that  skill,  in  evading  commercial  regulations, 
which  they  have  since  carried  to  the  highest  degree  of  perfection ; 
to  escape  these  Portuguese  restrictions  they  manufactured  woollen 
goods,  different  from  the  ordinary  woollen  cloths,  but  suitable 
for  the  same  uses,  and  introduced  them  into  Portugal  under  the 
name  of  serges  or  woollen  druggets.  But  this  artifice  was  soon 
discovered  and  counteracted  by  the  prohibition  of  such  stuffs.f 
The  success  of  this  effort  is  the  more  surprising,  as  but  a  short 
time  before  Portugal  had  lost  by  the  expulsion  of  the  Jews  a 
large  amount  of  capital,  and  was  still  a  prey  to  all  the  evils  of 
fanaticism,  still  groaning  under  a  detestable  government,  suf 
fering  from  a  feudal  aristocracy  pressing  heavily,  not  only  upon 
public  liberty,  but  upon  agriculture. 

In  1703,  after  the  death  of  Count  Ereceira,  the  famous 
English  minister  Methuen  succeeded  in  persuading  the  Portu 
guese  government  that  it  would  be  extremely  advantageous  if 
Portugal  could  have  her  wines  admitted  into  England,  paying 
one-third  less  duties  than  the  wines  of  other  countries,  upon  the 
simple  condition  of  receiving  English  cloths  at  the  rate  of  duty 
established  previous  to  1684,  or  twenty-three  per  cent.  On  the 
part  of  the  king  the  hope  of  increasing  his  income  by  customs, 
and  on  the  part  of  the  aristocracy  the  hope  of  increasing  their 
rents,  were  the  ruling  motives  for  that  treaty  of  commerce ; 
since  that  time,  the  king  of  England  has  called  the  king  of 
Portugal  his  most  ancient  friend  and  ally,  and  in  the  same 
sense  as  the  Roman  Seriate  conferred  these  titles  upon  the  sove 
reigns  who  were  unfortunate  enough  to  be  subjected  to  such 
intimacies. 

Immediately  after  the  treaty  went  into  operation,  Portugal 
was  overflowed  with  English  goods,  and  the  first  effect  of  this 
inundation  was  the  sudden  and  complete  ruin  of  the  Portuguese 
manufacturers ;  an  effect  quite  similar  to  that  of  the  treaty  of 

*  British  Merchant,  vol.  iii.,  p.  69.  f  Ibid,  vol.  iii.,  p.  71. 


SPAIN    AND    PORTUGAL.  133 

Eden,  afterwards  concluded  between  France  and  England,  and 
to  that  of  the  suppression  of  the  continental  system  in  Germany. 

According  to  Anderson,  the  English  were  even  then  such 
adepts  in  the  art  of  under -valuing  goods,  that  they  did  not  pay 
in  reality  more  than  "half  of  the  duties  imposed  by  the  tariff* 

"  But  after  the  taking  off  of  that  prohibition,  we  brought 
away  so  much  of  their  silver  as  to  leave  them  very  little  for 
their  necessary  occasions,  and  then  we  began  to  bring  away 
their  gold."f 

The  English  continued  that  operation  down  to  the  present 
time  ;  they  drew  off  the  precious  metals  received  by  the  Portu 
guese  from  their  colonies,  and  exported  a  great  part  of  them  to 
China,  where,  as  has  been  shown  in  speaking  of  England,  they 
obtained  for  them  goods  which  they  exchanged  upon  the  con 
tinent  for  raw  materials.  The  yearly  exports  of  England  to 
Portugal  exceeded  the  imports  thence  one  million  pounds; 
this  balance  in  favor  of  England  depressed  the  rate  of  exchange 
fifteen  per  cent.,  to  the  detriment  of  Portugal.  We  have  a' 
greater  balance  of  trade  with  Portugal  than  with  any  other 
country  whatsoever,  says  the  author  of  the  "British  Merchant," 
in  his  dedication  to  Sir  Paul  Methuen,  the  son  of  the  celebrated 
minister ;  we  have  increased  our  exports  thither,  from  about 
three  hundred  thousand  pounds  a  year,  to  near  a  million  and 
a  half. 

That  treaty  has  since  been  regarded  by  the  merchants,  by  the 
economists,  and  by  the  statesmen  of  England,  as  a  master-piece 
of  English  commercial  policy.  Anderson,  who  is  shrewd  enough 
in  what  regards  the  commercial  interests  of  his  country,  and 
who  expresses  himself  throughout  with  great  frankness,  though 
after  a  manner  of  his  own,  calls  it  a  treaty  eminently  equitable 
and  advantageous,  and  he  cannot  forbear  exclaiming,  naively, 
"  may  it  last  for  ever  !"  { 

It  was  reserved  for  Adam  Smith  to  express  views  diametrically 
opposed  to  the  received  opinion,  and  to  maintain  that  the  treaty 
of  Methuen  had  procured  no  considerable  advantages  for  English 

*  Anderson  ;  vol.  iii.,  p.  67.  f  British  Merchant ;  vol.  iii.,  p.  15. 

J  Anderson  :  year  1703. 


134  HISTORY. 

trade.  If  any  thing  attests  the  blind  respect  with  which  the 
public  has  adopted  the  paradoxes  of  that  illustrious  man,  it  is 
the  fact  that  such  an  assertion  has  remained  without  a  contra 
diction.* 

In  the  fourth  chapter  of  Book  VI.,  Smith  says  that  the  treaty 
of  Methuen,  by  admitting  Portuguese  wines  at  a  duty  one-third 
less  than  that  charged  upon  other  wines,  had  granted  the  Portu 
guese  a  privilege  ;  whilst  the  English,  being  obliged  to  pay  upon 
their  cloths  in  Portugal  the  same  'duty  as  other  nations,  had 
received  nothing  in  exchange.  But  the  Portuguese  previous  to 
this  had  purchased  from  France,  Holland,  Germany,  and  Bel 
gium,  a  large  proportion  of  the  foreign  commodities  required 
for  their  consumption.  Did  not  the  English  from  that  time 
enjoy  a  monopoly  of  the  Portuguese  market  for  products  manu 
factured  by  them,  and  of  which  they  also  possessed  the  raw 
material  ?  Did  they  not  find  in  this  trade  full  compensation  for 
the  heavy  duties  ?  Did  not  the  course  of  exchange  favor  the 
consumption  of  Portuguese  wines  in  England  by  the  difference 
of  about  fifteen  per  cent  ?  Did  not  the  exportation  of  French 
and  German  wines  to  England  nearly  altogether  cease  ?  Did 
not  the  gold  and  silver  of  Portugal  furnish  England  the  means 
of  buying  in  India  large  stocks  of  goods,  with  which  the  conti 
nent  of  Europe  was  inundated  ?  Were  not  the  manufactures 
of  cloth  in  Portugal  entirely  ruined  for  the  benefit  of  the  Eng 
lish  manufactures  ?  Did  not  all  the  colonies  of  Portugal,  and 
especially  rich  Brazil,  thus  become  virtually  English  colonies  ? 
Of  course  that  treaty  gave  to  Portugal  a  privilege,  but  one 
merely  nominal ;  it  conferred  upon  the  English  a  privilege  de 
facto.  The  same  spirit  pervades  other  commercial  treaties  of 
England.  Thus,  cosmopolites  and  philanthropists  in  words,  the 
English  have  ever  been  monopolists  in  practice. 

According  to  the  second  argument  of  Adam  Smith,  the  treaty 
has  not  been  advantageous  to  England,  for  the  following  reason  : 

*  The  French  translator  agrees  with  List,  and  remarks  that  Smith  has 
been  contradicted  in  this  opinion.  He  cites  this  passage  from  Blanqui : 
"  Facts  have  demonstrated  forcibly  enough  that  the  Treaty  of  Methuen  waa 
no  disadvantage  to  Great  Britain."  Blanqui  is  of  Smith's  school.  —  S.  C. 


SPAIN    AND    PORTUGAL.  135 

The  money  received  from  the  Portuguese  for  cloths  was  sent,  in 
great  part,  to  other  countries  to  be  exchanged  for  goods,  whilst 
it  would  have  been  more  profitable  to  exchange  the  cloths 
at  once  for  the  goods  they  wanted,  obtaining  by  one  operation, 
what  in  their  commerce  with  Portugal  required  two  exchanges. 
But  for  our  high  opinion  of  the  character  and  sagacity  of  this 
celebrated  writer,  such  reasoning  might  lead  us  to  doubt  his  sin 
cerity  or  his  intelligence.  For  the  honor  of  both,  we  shall  limit 
our  remarks  to  an  expression  of  regret  at  the  weakness  of  human 
nature,  from  which,  even  Adam  Smith  could  not  escape  whilst 
uttering  these  strange  and  almost  ridiculous  arguments,  blinded 
as  he  was  by  the  idea,  not  ungenerous  in  itself,  of  justifying 
absolute  free  trade.* 

The  argument  we  have  just  quoted  is  not  more  reasonable,  nor 
more  logical  than  this :  that  a  baker  who  sells  bread  to  his  cus 
tomers  for  money,  and  with  that  money  buys  flour  from  the 
miller,  is  not  doing  an  advantageous  business,  because  he  is  not 
directly  exchanging  his  bread  for  flour,  and  is  carrying  on  his 

*  Smith,  like  many  others,  was  smitten  with  a  love  of  free  trade,  because 
it  implied  a  love  for  freedom  in  general.  But  he  was  not  sufficiently 
familiar  with  the  details  to  understand  the  effects  of  free  trade  in  its  actual 
results.  The  very  spirit  of  the  doctrine  is  that  individuals  must  be  left  to 
pursue  trade  in  their  own  way.  Now  the  operation  which  Smith  regards 
as  of  such  disadvantage  to  England  was  the  combined  movement  of  English 
merchants  acting  freely  upon  a  certain  condition  of  things.  It  was  indi 
vidual  judgment  and  skill  which  determined  the  whole  course  of  the  trade. 
If  English  merchants  had  known  any  better  market  for  their  cloths  than 
that  of  Portugal,  they  would  have  sent  their  cloths  to  it.  But  they  sent 
them  to  Portugal,  taxed  the  Portuguese  with  a  heavy  exchange,  and  ex 
ported  the  precious  metals  to  India,  by  which  they  monopolized  the  India 
trade,  on  which  they  made  large  profits  in  their  traffic  with  the  Continent, 
by  the  same  operation  injuring  the  cotton  and  silk  manufactures  of  the 
Continent,  whilst  they  protected  their  own.  The  great  object  of  wise  in 
dustrial  and  commercial  legislation  is  to  protect  home  industry,  save  it 
from  revulsions  and  fluctuations  originating  abroad,  and  to  furnish  mer 
chants  a  sphere  of  operations  in  which  they  may  display  all  their  skill  and 
enterprise  without  injury  to  the  industry  of  their  own  country.  This  is  the 
policy  which  England  has  pursued  with  little  deviation  for  more  than  two 
centuries.  All  the  testimony  goes  to  show  that  the  trade  with  Portugal 
was  one  of  the  most  profitable  enjoyed  by  England.  —  S.  C. 


136  HISTORY. 

business  by  two  exchanges  instead  of  one.  It  floes  not  require 
much  sagacity  to  suggest  that  perhaps  the  miller  does  not  con 
sume  as  much  bread  as  the  baker  would  furnish ;  that  perhaps 
the  miller  himself  prefers  to  bake  his  own  bread,  that  he  may, 
in  fact,  be  a  baker,  and  that,  of  course,  the  business  of  the  baker 
could  not  have  been  carried  on  without  the  two  exchanges.  Such 
was  the  commercial  position  of  Portugal  and  England  at  the  time 
of  that  treaty.  Portugal  received  from  South  America  gold  and 
silver  for  the  commodities  she  sent  thither ;  but  either  through 
want  of  industry  or  want  of  good  sense  she  neglected  to  manu 
facture  the  commodities  required  for  her  own  consumption, 
preferring  to  obtain  them  in  England  in  exchange  for  the 
precious  metals. 

That  portion  of  those  precious  metals,  which  was  not  required 
for  the  circulation  of  their  own  country,  was  exported  by  the 
English  to  the  East  Indies  and  to  China,  and  employed  in  the 
purchase  of  goods  to  be  disposed  of  upon  the  continent  of  Europe, 
whence  they  imported  agricultural  products,  raw  materials,  and 
sometimes  even  the  precious  metals. 

We  inquire  then  seriously,  in  the  name  of  common  sense,  who 
would  have  purchased  from  the  English  all  the  cloths  sent  by 
them  to  Portugal,  had  the  Portuguese  preferred  to  manufacture 
for  themselves,  or  to  buy  them  elsewhere  ?  Not  being  saleable 
in  Portugal,  and  other  countries  being  already  supplied  with  all 
they  would  take,  they  must,  of  course,  have  discontinued  manu 
facturing  for  Portugal;  they  must  have  discontinued  sending 
the  precious  metals  to  India  ;  their  commerce  between  India  and 
the  Continent  of  Europe  must  come  to  an  end,  and,  of  course, 
they  must  have  imported  from  that  continent  a  quantity  propor- 
tionably  less  of  raw  materials. 

The  third  argument  of  Adam  Smith,  that  the  English  not  re 
ceiving  the  precious  metals  from  Portugal,  would  have  procured 
them  elsewhere,  will  not  bear  examination.  Portugal,  says  he, 
would  have  sent  abroad  her  surplus  of  precious  metals,  and  in 
one  way  or  in  another  consequently,  they  must  have  come  at  last 
to  the  hands  of  the  English. 

If  the  Portuguese  had  manufactured  their  own  cloths,  if  they 


SPAIN    AND    POKTUGAL.  137 

had  sent  to  China  and  the  East  Indies  the  surplus  of  their  pre 
cious  metals,  and  had  sold  their  return  cargoes  in  other  coun 
tries,  we  need  scarcely  affirm  that  the  English  would  have  seen 
very  little  Portuguese  gold.  It  would  have  been  just  the  same 
if  Portugal  had  made  a  treaty  like  that  of  Methuen  with  Holland 
and  France.  In  hoth  cases  England  would,  of  course,  have  re 
ceived  some  money,  but  only  what  would  have  been  realized 
upon  her  sales  of  raw  wool.  In  short,  the  manufacturing  indus 
try,  and  the  commercial  navigation  of  the  English,  would  never 
have  made  the  progress  they  did  but  for  the  treaty  of  Methuen. 

But  whatever  opinion  is  entertained  as  to  the  results  of  the 
treaty  of  Methuen  upon  England,  it  must  be  admitted  that  with 
regard  to  Portugal  they  have  not  been  such  as  to  encourage 
other  countries  to  sacrifice  their  manufacturing  industry  to 
English  competition,  with  the  view  of  favoring  the  export  of 
their  own  agricultural  products.* 

The  agriculture  and  manufactures,  the  commerce  and  naviga 
tion  of  Portugal  far  from  being  invigorated  by  this  arrangement 
with  England,  declined  thenceforward  without  intermission. 
Pombal  vainly  attempted  to  revive  them ;  English  competition 
rendered  all  such  efforts  powerless.  Moreover,  it  cannot  be 
denied  that  in  a  country  like  Portugal,  where  the  whole  social 
system  was  a  clog  upon  the  development  of  agriculture  and 
trade,  mere  commercial  policy  could  effect  nothing  satisfactory. 
The  good  done  by  Pombal,  though  little,  shows,  however,  what 
important  services  a  government,  animated  with  a  desire  to  pro 
mote  industry,  can  render  it  whenever  the  social  obstacles  which 
interfere  are  removed. 

A  similar  experiment  was  tried  in  Spain  in  the  reign  of 
Philip  V.  and  his  two  immediate  successors.  Inadequate  as  was 
the  protection  accorded  by  the  Bourbons  to  national  industry, 
and  inadequate  as  was  the  execution  of  the  laws  for  the  collec 
tion  of  duties,  all  branches  of  industry,  all  the  provinces  of  the 

*  The  English  injured  no  industry  of  their  own  by  receiving  the  wine  of 
Portugal,  and  all  the  encouragement  to  the  import  of  that  wine  was  so 
much  favor  to  her  own  manufactures  of  wool.  —  [S.  C.] 


138  HISTORY. 

kingdom  received  a  visible  and  remarkable  impulse  from  the 
introduction  into  Spain  from  France  of  Colbert's  commercial 
policy.*  The  reader  of  Ustaritz  and  Ulloa  cannot  but  be  as 
tonished  at  the  results  in  such  a  nation.  Roads  throughout 
the  whole  country  were  so  bad  as  to  be  practicable  only  for 
mules ;  without  good  inns  for  travellers,  without  bridges,  canals, 
or  river  navigation;  the  provinces  all  separated  by  lines  of 
custom-houses,  a  royal  toll-house  at  the  gates  of  every  city; 
robbery  and  beggary  followed  as  trades ;  the  commerce  of  con 
traband  at  the  highest  degree  of  activity,  a  system  of  taxation 
wholly  ruinous  ;  such,  according  to  those  writers,  were  the  causes 
of  the  decay  of  industry  and  agriculture.  They  dared  not  de- 
noynce  the  chief  causes  of  these  evils  —  the  fanaticism,  avarice, 
and  other  vices  of  the  clergy,  the  privileges  of  the  nobility,  and 
the  despotism  of  the  government,  the  lack  of  knowledge,  and  the 
need  of  liberty  among  the  people. 

A  worthy  counterpart  of  the  treaty  of  Methuen  is  the  treaty 
of  Assiento,  made  with  Spain  in  1713 ;  by  authorizing  the  En 
glish  to  carry  yearly  into  Spanish  America  a  certain  number  of 
negroes  from  Africa,  and  to  visit  the  port  of  Porto-Bello,  every 
year  with  one  ship,  the  English  were  enabled  to  introduce  by 
fraud  into  those  countries  a  vast  quantity  of  manufactured  goods. 

Thus  all  the  English  treaties  of  commerce  exhibit  a  constant 
tendency  to  make  every  country  with  which  they  negotiate  sub 
servient  to  their  industry  and  profit,  offering  to  all  apparent 
advantages  in  the  purchase  of  agricultural  products  and  raw 
materials.  Their  constant  effort  has  been  to  ruin  the  industry 
of  other  countries  by  the  cheapness  of  their  manufactures  and 
by  the  length  of  their  credits.  When  they  cannot  secure  a  low 
tariff,  they  try  by  fraud  or  cunning  device  to  elude  the  duties, 
or  they  organize  smuggling  upon  a  large  scale ;  they  succeeded 
by  the  first  plan  in  Portugal,  and  by  the  second  in  Spain. 

*  Macpherson,  Annals  of  Commerce,  years  1771-1774.  The  restrictions 
upon  the  import  of  foreign  products  contributed  powerfully  to  the  development 
of  Spanish  manufactures.  Until  then,  Spain  had  derived  nineteen-twentieths 
of  her  supply  of  manufactured  goods  from  England.  —  Brougham :  Be- 
searches  upon  the  Colonial  Policy  of  the  European  powers  ;  vol.  i. 


SPAIN    AND    PORTUGAL.  139 

The  imposition  of  duties  ad  valorem  upon  importations,  has  been 
especially  to  their  advantage ;  it  was  with  a  view  to  this  policy 
that  they  recently  endeavored  to  discredit  the  system  of  duties 
by  weight,  established  by  Prussia.* 

*  That  the  commercial  policy  long  pursued  by  England  is  here  correctly 
stated,  every  one  familiar  with  the  history  of  commerce,  knows.  England 
has  thus  undoubtedly  built  up  a  vast  manufacturing  power  and  a  vast  com 
mercial  marine.  We  must,  however,  be  careful  not  to  regard  this  as  the 
highest  national  duty  or  benefit.  The  chief  end  of  a  Government  should 
be  the  happiness  and  welfare  of  its  people.  The  English  Government  bent 
all  its  powers  to  promote  its  foreign  commerce;  even  the  protection  to 
home  industry  was  mainly  to  promote  foreign  trade.  The  idea  that  if  trade 
without  was  great  and  prosperous  all  must  go  right  within,  seemed  to 
prevail.  The  aim  was  to  obtain  possession  of  foreign  markets  by  every 
means,  fair  or  unfair.  The  chief  mode,  however,  was  of  course  under 
selling  others.  England  aimed  to  become  manufacturer  for  the  world  at 
lower  prices  than  any  of  her  rivals.  That  policy  made  a  few  large  cities 
and  a  few  very  rich  merchants.  But  it  contained  one  bad  feature  for  the 
people  of  England,  —  they  were  called  upon  to  furnish  goods  cheaper  than 
all  other  people  —  they  were  called  upon  to  produce  not  for  themselves  but 
for  the  world.  This  implied  the  lowest  possible  wages  to  the  laborer. 
England  has  sold  goods  lower  than  any  other  country,  except  those  of  tho 
East  Indies  and  China,  and  she  has  given  the  largest  and  the  longest 
credit ;  and  we  say  that  the  whole  burden  of  this  fatal  policy  has  been  laid 
upon  the  working  population  of  Great  Britain.  The  large  manufacturers 
and  the  great  merchants  have  made  their  profits  —  but  look  at  the  manu 
facturing  population  of  that  country.  What  has  been  the  benefit  to  them  ? 
Are  they  any  better  clothed  or  fed  ?  Are  they  not  rather  the  slaves  of  this 
infatuated  pursuit  of  foreign  commerce  at  the  expense  of  the  laborer  at 
home  ?  England  was  right  in  protecting  her  industry,  but  the  protection  of 
industry  should  not  be  for  the  glory  of  an  increased  foreign  trade,  for  the 
construction  of  a  navy,  or  the  increase  of  the  commercial  marine,  for  the 
building  of  large  commercial  cities,  or  the  enriching  of  a  few  thousand 
merchants,  but  for  their  benefit  whose  industry  is  thus  protected.  It  is 
not  for  the  benefit  of  the  merchants  or  the  manufacturers,  but  for  the 
benefit  of  the  people,  —  all  the  people,  that  industry  should  be  protected. 

No  foreign  trade  can  be  useful  to  a  whole  population,  unless  the  home 
trade  is  first  carried  to  its  proper  limits.  The  people  must  first  manufac 
ture  for  themselves,  to  the  full  extent  of  their  wants  at  home,  before  they 
attempt  to  furnish  goods  at  such  cheap  rates  that  they  will  sell  in  any 
market  in  the  world.  The  people  of  Great  Britain  should  be  enabled  to 
make  a  full  exchange  among  themselves  of  their  own  products,  let  what 
may  become  of  their  export  trade.  The  average  annual  consumption  of 


140  HISTORY. 

CHAPTER  VI. 

FRANCE. 

FRANCE  had  also  preserved  some  remnants  of  Roman  civiliza 
tion.  Under  the  influence  of  the  Germans,  who  were  inclined 
only  to  the  chase,  and  who  had  suffered  fields  formerly  culti 
vated  to  return  to  a  state  of  wilderness,  those  remnants  of 
ancient  civilization  in  a  great  measure  disappeared.  It  was  to 
the  monasteries,  afterwards  so  great  an  obstacle  to  civilization, 
that  France,  as  well  as  the  rest  of  Europe,  was  indebted  during 
the  Middle  Ages  for  the  chief  part  of  her  progress  in  agricul 
ture.  The  inhabitants  of  convents  did  not  engage  in  feuds  and 
bloodshed  like  the  nobility,  they  did  not  oppress  their  vassals 
with  military  service,  their  fields  and  their  cattle  were  less 
exposed  to  pillage  and  destruction.  Ecclesiastics  loved  good 
living,  they  hated  war  and  sought  to  acquire  consideration  by 
helping  the  poor.  Hence  the  proverb,  "  It  is  good  to  live  under 
the  crosier." 

The  crusades,  the  foundation  by  St.  Louis  of  the  communes 
and  corporations,  the  vicinity  of  Italy  and  Flanders,  gave  early 
aid  to  the  development  of  art  and  trade  in  France.  Since  the 
fourteenth  century,  Normandy  and  Brittany  furnished  stuffs  of 

the  population  per  head  in  Great  Britain  and  Ireland,  does  not  much  ex 
ceed  seventy  dollars,  for  food,  clothing,  and  other  necessaries ;  whilst  in  the 
United  States  it  falls  little  short  of  a  hundred  dollars.  The  true  problem 
in  Great  Britain  and  Ireland  is  to  increase  the  consumption  of  the  people ; 
that  is,  to  enable  them  to  purchase  better  food  and  more  of  it,  and  better 
clothing  and  more  of  it ;  and  so  of  other  necessaries  and  comforts  of  life. 
If  twenty-five  dollars  per  head  were  thus  added  to  the  yearly  consumption 
of  man,  woman,  and  child  in  Great  Britain  and  Ireland,  it  would  furnish 
an  additional  home  market  for  their  industry  of  more  importance  than  all 
their  foreign  trade.  And  it  may  be  fairly  conjectured  that  if  this  were 
judiciously  effected  the  foreign  trade  would  not  be  less.  The  imports  of 
Great  Britain  do  not  vary  far  from  twelve  dollars  per  head  of  the  popula 
tion  ;  but  they  do  not  furnish  so  much  for  individual  consumption,  as 
they  consist  mainly  of  raw  materials,  which  are  re-exported.  —  [S.  C.] 


FRANCE.  141 

wool  and  flax  for  domestic  consumption  and  for  export  to 
England,  the  shipment  thither  in  the  same  period  of  wine  and 
salt,  especially  by  the  intervention  of  the  Hanseatic  cities,  being 
considerable.  Francis  I.  introduced  the  manufacture  of  silk  in 
the  south  of  France.  Henry  IV.  favored  it,  as  well  as  those  of 
glass,  linens,  and  woollens ;  Richelieu  and  Mazarin  also  encou 
raged  the  silk  manufacture,  the  making  of  velvets  and  the 
woollens  of  Rouen  and  Sedan  as  well  as  fisheries  and  navigation. 

No  country  felt  more  than  France  the  discovery  of  America. 
The  western  provinces  sent  their  wheat  to  Spain.  The  peasants 
emigrated  every  year  in  large  numbers  from  the  foot  of  the 
Pyrenees  to  the  north-eastern  part  of  Spain,  seeking  employment. 
Vast  quantities  of  wine  and  salt  were  sent  to  the  Spanish 
Netherlands ;  silks,  velvets,  and  other  articles  of  luxury  of 
French  manufacture,  found  an  important  market  in  the  Nether 
lands,  in  England,  Spain,  and  Portugal.  Spanish  gold  and 
silver  entered  abundantly  at  an  early  day  into  the  circulation  of 
the  kingdom. 

The  splendid  period  of  French  industry  commenced,  however, 
only  with  Colbert. 

At  Mazarin 's  death  the  manufacturing  industry,  commerce, 
navigation,  and  the  maritime  fisheries  of  the  country  had  lost 
their  importance,  and  its  finances  were  in  a  deplorable  state. 
Colbert  had  the  courage  to  undertake  alone  a  work  that  England 
had  accomplished  only  by  three  centuries  of  efforts  and  two 
revolutions.  He  invited  from  every  quarter  manufacturers  and 
the  most  skilful  workmen,  he  paid  for  the  secrets  of  manufactu 
rers  and  procured  better  machinery  and  better  implements.  By 
the  aid  of  a  well-conceived  general  system  of  customs,  he 
secured  to  the  industry  of  the  country  the  home  market  by 
suppressing  or  -limiting  as  much  as  possible  the  provincial  cus 
toms  :  by  constructing  roads  and  canals,  he  promoted  domestic 
trade. 

Agriculture  derived  even  more  advantage  than  manufactures 
from  these  various  measures ;  the  consumers  of  its  productions 
were  increased  from  two  to  three  fold,  and  the  producers  and 
consumers  were  brought  into  easy  communication.  He  favored 


142  HISTORY. 

agriculture  still  farther  by  the  diminution  of  the  direct  taxes 
upon  land,  by  relaxing  the  processes  of  collection,  hitherto  very 
rigorous ;  by  a  more  equal  apportionment  of  the  burdens ;  finally 
by  measures  tending  to  reduce  the  rate  of  interest.  He  pro 
hibited  exportation  of  grain  only  in  times  of  scarcity.  He  had 
especially  at  heart  the  extension  of  foreign  commerce  and  the 
development  of  the  fisheries  ;  he  resumed  trade  with  the  Levant, 
enlarged  the  colonial  commerce,  and  opened  up  a  trade  with  the 
North.  In  all  branches  of  the  administration  he  introduced  the 
strictest  economy  and  order.  France,  at  his  death,  reckoned 
fifty  thousand  looms  for  wool,  and  produced  silks  to  the  value 
of  fifty  million  francs  ;  her  public  income  had  increased  twenty- 
eight  millions ;  she  possessed  flourishing  fisheries,  a  vast  naviga 
tion  and  a  powerful  navy.* 

A  century  afterwards,  the  economists  censured  Colbert 
severely,  pretending  that  that  statesman  had  favored  manufac 
turing  industry  at  the  expense  of  agriculture,  a  censure  which 
proves  only  that  they  did  not  comprehend  the  nature  of  manu 
facturing  industry,  f 

Though  Colbert  committed  a  fault  in  discouraging  or  opposing 
the  export  of  raw  materials,  he  increased,  by  this  development 
of  manufacturing  industry,  the  demand  for  agricultural  products, 
and  thus  indemnified  agriculture  tenfold  for  any  injury  inflicted 
upon  it  by  those  restrictions.  If,  contrary  to  the  principles  of 
enlightened  policy,  he  prescribed  new  processes  and  compelled 
manufacturers  to  adopt  them,  it  should  be  remembered  that  they 
were,  after  all,  the  best  and  most  advantageous  of  his  time,  and 

*  Necker:  Eulogy  of  Colbert,  1773. 

f  Quesnay,  in  his  Physiocratie,  Note  5  to  Maxim  VIII.,  undertakes,  in 
two  pages,  to  demolish  the  whole  policy  of  Colbert's  administration. 
Necker  required  an  hundred  pages  to  set  forth  its  wisdom  and  merits. 
It  is  hard  to  say  whether  we  ought  to  be  more  astonished  at  the  ignorance 
of  Quesnay  in  all  that  concerns  industry  or  finances  or- at  the  presumption 
with  which,  without  adequate  motive,  he  abuses  such  a  statesman  as  Col 
bert.  This  ignorant  dreamer  had  not  even  the  frankness  to  mention  the 
expulsion  of  the  Huguenots.  Nay,  he  has  not  blushed  to  assert,  in  the  face 
of  opposing  facts,  that  Colbert  obstructed  by  vexatious  regulations  the 
domestic  trade  in  grain. 


FRANCE.  143 

that  he  had  to  do  with  a  people  in  a  state  of  apathy,  superinduced 
by  long  endurance  of  despotism,  repelling  every  novelty  even 
when  it  promised  great  advantage.  The  reproach  of  having,  by 
his  protective  system,  destroyed  French  industry  in  a  large 
degree,  could  be  uttered  against  Colbert  only  by  a  school  entirely 
ignorant  of  the  revocation  of  the  edict  of  Nantes  and  its  fatal 
consequences.  By  that  deplorable  step  France  lost  after  the 
death  of  Colbert,  in  the  space  of  three  years,  half  a  million  of 
her  most  industrious,  her  richest,  and  most  skilful  inhabitants, 
who,  to  the  double  prejudice  of  their  own  country,  which  they 
had  enriched,  carried  their  industry  and  their  capital  to  Switz 
erland,  Protestant  Germany,  and  particularly  to  Prussia,  as  well 
as  to  Holland  and  England.  Thus  the  intrigues  of  a  bigoted 
mistress  destroyed  in  three  years  the  splendid  work  of  a  whole 
generation,  and  plunged  France  into  her  ancient  apathy ;  whilst 
England,  sustained  by  her  constitution,  and  stimulated  by  the 
energy  which  her  revolution  had  imparted,  pursued  unremittingly 
and  with  increasing  ardor  the  policy  of  Elizabeth  and  her  pre 
decessors. 

The  sad  state  into  which  the  industry  and  finances  of  France 
had  been  reduced  by  the  protracted  incapacity  of  the  govern 
ment,  and  the  spectacle  of  the  great  prosperity  of  England, 
excited,  for  a  short  time  before  the  French  revolution,  the  emu 
lation  of  the  statesmen  of  that  country.  Preoccupied  with  the 
empty  theory  of  the  economists,  and  departing  from  Colbert's 
successful  policy,  they  sought  a  remedy  in  the  establishment  of 
free  trade.  They  expected  to  restore,  with  a  few  strokes  of ; 
the  pen,  the  lost  prosperity  of  the  kingdom,  by  procuring  for 
French  wines  and  brandies  a  more  extensive  market  in  England, 
in  return  for  admitting  the  manufactured  products  of  England, 
upon  the  more  favorable  conditions  of  a  duty  of  twelve  per 
cent.  Delighted  with  this  proposition,  England  cheerfully  con 
ceded  to  France  a  second  edition  of  the  treaty  of  Methuen  in 
the  treaty  of  Eden,  a  present  which  soon  produced  effects  quite 
as  disastrous  as  the  Portuguese  original. 

The  English,  accustomed  to  the  stronger  wine  of  Portugal, 


144  HISTORY. 

did  not  increase  their  consumption  of  French  wine  as  rapidly 
as  was  expected.  On  the  other  hand,  the  French  soon  disco 
vered  with  dismay  that  they  could  only  export  to  England  arti 
cles  of  fashion  and  luxury,  the  whole  value  of  which  was  insig 
nificant  ;  that  the  English  manufacturers  had  far  the  advantage 
of  theirs,  as  well  in  cheapness  of  their  goods,  as  in  their  supe 
rior  qualities,  and  in  the  length  of  credits,  given  for  all  articles 
of  first  necessity,  the  total  value  of  which  was  immense.  This 
foreign  competition  having  in  a  short  space  of  time  reduced 
the  French  manufactures  to  the  very  verge  of  destruction, 
the  French  vineyards  having  in  the  mean  time  realized  but  little 
advantage,  the  government  attempted,  by  the  abandonment  of 
the  treaty,  to  stay  the  progress  of  ruin.  Fatal  experience  soon 
evinced,  that  it  is  much  easier  in  a  few  years  to  ruin  a  flourish 
ing  industry,  than  to  build  one  up  in  a  whole  generation.  Eng 
lish  competition  had  established  in  France  a  taste  for  English 
articles,  which  for  a  long  time  stimulated  and  supported  an 
extensive  contraband  trade  difficult  to  suppress.  After  the 
discountenance  of  the  treaty,  the  English  had  much  less  diffi 
culty  in  returning  to  the  wines  of  the  peninsula. 

Though  the  troubles  of  the  revolution,  and  the  continual  wars 
of  Napoleon,  were  far  from  favorable  to  French  industry,  and 
though,  during  that  period,  France  lost  the  greatest  part  of  her 
foreign  commerce  and  all  her  colonies,  French  manufactures, 
favored  only  by  the  exclusive  possession  of  their  own  markets,  and 
by  the  abolition  of  feudal  impediments,  enjoyed  under  the  empire 
a  prosperity  greater  than  under  any  former  dynasty.  The  same 
remark  has  been  made  with  regard  to  Germany,  and  to  the  other 
countries  subject  to  the  restrictions  of  the  continental  system. 

In  his  peremptory  style,  Napoleon  had  said,  that  a  country 
which,  in  the  actual  state  of  the  world,  should  attempt  to  .carry 
out  the  principle  of  free  trade,  would  be  ground  to  dust.*  By 
this  he  evinced  more  political  good  sense  than  the  contemporary 
economists  in  all  their  works.  We  cannot  but  be  astonished  at 
the  sagacity  with  which  this  great  man,  without  having  studied 

*  These  words  are  attributed  to  him :  —  "If  an  empire  were  made  of 
adamant,  Political  Economy  would  grind  it  to  dust."  —  [S.  C.] 


FRANCE.  145 

the  systems  of  political  economy,  appreciated  and  understood 
the  nature  and  importance  of  manufacturing  industry.* 

"Formerly,"  Napoleon  is  reported  to  have  said,  "there  was 
only  one  kind  of  property,  land ;  another  has>  since  arisen,  in 
dustry."  Napoleon  then  saw,  and  expressed  clearly,  what  the 
economists  of  the  time  did  not  see,  or  at  least  did  not  distinctly 
express,  that  a  country  which  unites  manufacturing  industry 
and  agriculture,  is  far  better  adjusted,  and  far  richer,  than  a 
country  merely  agricultural.  What  Napoleon  has  done  to  con 
solidate  or  develop  the  industrial  education  of  France,  to  reani 
mate  credit,  to  introduce  and  to  bring  into  use  new  discoveries 
and  improvements  to  perfect  the  means  of  conveyance,  is  too 
well  known  to  require  repetition  here ;  but  it  may  be  useful  to 
recall  the  strange  and  unjust  censures  which  theorists  have  pro 
nounced  against  that  enlightened  and  firm  ruler. 

The  downfall  of  Napoleon  was  the  signal  for  English  compe 
tition,  restrained  during  his  rule  to  the  work  of  smuggling,  to 
assert  and  regain  its  power  upon  the  continent  of  Europe  and 
America.  For  the  first  time,  the  Efaglish  were  then  heard  to 
denounce  the  protective  system,  and  to  extol  Adam  Smith's 
theory  of  free  trade,  a  theory  which  these  practical  Islanders 
had  hitherto  branded  as  Utopian.  Every  calm  observer  could 
easily  see  that  the  enthusiasm  of  philanthropy  had  little  to  do 
with  this  conversion,  for  these  cosmopolite  doctrines  were  only 
brought  forward  when  the  subject  of  discussion  was  the  exporta 
tion  of  English  manufactures  to  the  continent  of  Europe  or  that 
of  America,  but  when  the  free  importation  of  grain,  or  even 
competition  with  foreign  manufactures  in  the  English  market 

*  Chateaubriand,  in  his  Memoirs  from  beyond  the  Tomb,  volume  fifth,  in 
forms  us  that  this  extraordinary  man  was  no  stranger  to  economical  studies. 
"  Between  1784  and  1793,  was  the  period  of  the  literary  career  of  Napo 
leon, — a  space  short  in  time,  but  long  in  labors.  He  applied  himself  to 
the  historians,  philosophers,  economists ;  to  Herodotus,  Strabo,  Diodorua 
Siculus,  Filangieri,  Mably,  Smith,  &c."  —  [II.  R] 

It  should  be  added,  that  the  great  collection  of  the  Political  Economists  of 
Italy,  by  Baron  Custodi,  in  fifty  volumes  8vo.,  is  some  evidence  of  his  at 
tention  to  the  subject ;  this  collection  having  been  made  at  his  instance  and 
expense  during  his  possession  of  Italy.  —  [S.  C.] 

10 


146  HISTORY. 

was  in  question,  quite  another  doctrine  was  often  put  forth.* 
The  long  application  of  an  unnatural  system  had  unhappily, 
they  said,  created  in  England  an  artificial  state  of  things,  which 
could  not  be  suddenly  changed  without  the  most  fatal  conse 
quences  ;  they  were  obliged  now  to  proceed  with  much  circum 
spection  and  prudence ;  that  England,  indeed,  was  to  be  pitied ; 
that  it  was  very  fortunate  for  the  nations  of  Europe  and  of 
America,  that  their  position  and  circumstances  allowed  them  to 
enjoy  at  once  the  full  benefits  of  free  trade. 

France,  though  her  old  dynasty  had  been  brought  back  to  her, 
under  the  banner,  or  at  least  by  the  gold  of  England,  listened 
but  a  short  time  to  these  arguments.  Free  trade  with  England 
occasioned  such  dreadful  disasters  to  an  industry  which  had 
grown  up  under  the  continental  system,  that  it  became  necessary 

*  An  intellectual  American  orator,  II.  Baldwin,  now  one  of  the  Judges 
of  the  Supreme  Court  of  the  United  States,  remarked,  with  equal  justness 
and  shrewdness,  of  Canning  and  Huskisson's  free-trade  doctrines,  "  that  it 
was  with  their  speeches  as  with  many  other  British  manufactures,  they 
were  made,  not  for  home  consumption,  but  for  exportation." 

We  know  not  whether  to  laugh  or  weep  when  we  contemplate  the  en 
thusiasm  with  which  the  cosmopolite  theorists,  and  among  them  J.  B.  Say, 
receive  the  announcement  of  the  reforms  of  Canning  and  Huskisson.  From 
their  joy  we  might  have  supposed  that  the  millennium  had  arrived.  Hero 
is  what  the  biographer  of  Canning  has  said  of  the  opinions  of  that  minister 
upon  free  trade.  "  Canning  was  perfectly  convinced  of  the  truth  of  the 
abstract  principle  of  free  trade,  that  commerce  is  sure  to  flourish  most  when 
wholly  unfettered  ;f  but,  since  such  had  not  been  the  opinion  either  of  our 
ancestors  or  of  surrounding  people,  and  since  in  consequence  restraints 
had  been  long  imposed  in  commercial  transactions,  a  state  of  things  had 
grown  up  to  which,  the  unguarded  application  of  the  abstract  principle, 
however  true  it  was  in  theory,  might  have  been  somewhat  mischievous  in 
practice."  —  Stapkton's  Life  of  Canning,  page  3. 

In  1828,  the  English  policy  was  revealed,  with  great  distinctness,  by  the 
Liberal,  Joseph  Hume,  who  spoke,  without  reserve,  of  strangling  tho 
manufactures  of  the  continent. 


t  Free  commerce  may  prosper  more,  the  fewer  the  restraints  j  but  are  the  interests 
of  the  country  and  its  whole  people  identical  with  the  interests  of  the  merchants? 
la  foreign  commerce  to  be  the  guiding  star  of  American  legislation  ?  Is  the  whole 
country  to  be  governed  by  their  policy  who  may  happen  to  be  most  interested  in  foreign 
commerce  ?  —  [S.  C.] 


GERMANY.  147 

to  seek  a  speedy  refuge  in  the  prohibitive  system,  under  the 
shield  of  which,  according  to  the  testimony  of  M.  Dupin,*  the 
manufacturing  industry  of  France  doubled  between  1815  and 

182T. 


CHAPTER  VII. 

GERMANY. 

WE  remarked,  when  speaking  of  the  Hanse  Towns,  that  Ger 
many,  after  Italy,  but  long  before  the  other  European  States, 
had  prospered  by  commerce ;  we  propose  now  to  continue  the  in 
dustrial  history  of  that  country,  glancing  first  at  her  primitive 
condition  and  early  developments. 

The  greatest  part  of  the  soil  of  ancient  Germany  was  used  for 
pasturage  and  for  warrens.  The  slaves  and  women  were  employed 
in  an  agriculture  at  once  insignificant  and  rude.  The  free  men 
were  exclusively  engaged  in  war  and  hunting,  which  is  the  origin 
of  the  German  nobility. 

This  nobility,  during  the  whole  of  the  Middle  Ages,  was  never 
otherwise  than  oppressive  to  agriculture,  hostile  to  manufac 
turing  industry,  and  blind  to  the  advantages  which,  in  its 
character  of  proprietor  of  the  soil,  it  might  have  drawn  from 
the  prosperity  of  both. 

Devotion  to  its  ancient  but  favorite  occupation  is  still  so  deeply 
rooted  in  that  class,  that  even  in  our  day,  though  long  since 
enriched  by  the  plough  and  the  shuttle,  it  keeps  up  the  subject 
of  warrens  and  the  chase  in  its  legislative  assemblies,  as  if  the 
wolf  and  the  lamb,  the  bear  and  the  bee,  could  live  peaceably 
side  by  side ;  as  if  the  soil  could  be  used  at  the  same  time  for 
garden  and  orchard,  for  intelligent  husbandry,  and  for  the 
keeping  of  wild  boars,  deer,  and  hares. 

The  agriculture  of  the  Germans  remained  long  in  this  rude 
state  in  spite  of  the  remarkable  influence  which  cities  and 
monasteries  had  in  their  several  vicinities. 

*  Dupin:  Productive  Forces  of  France. 


148  HISTORY. 

Cities  arose  in  the  ancient  Roman  colonies  near  the  residences 
of  Princes  and  Lords,  spiritual  and  temporal,  by  the  side  of 
monasteries,  upon  the  domains  and  around  the  palaces  of  the 
Emperors  who  aided  them,  and  in  places  where  fisheries  and 
communications  by  water  and  by  land  indicated  suitable  locali 
ties.  The  wants  of  these  localities  and  the  demands  of  inter 
mediate  commerce,  were  nearly  their  only  means  of  prosperity. 
Before  any  considerable  industry  could  be  established,  especially 
with  reference  to  foreign  markets,  great  flocks  of  sheep  and 
extensive  flax  culture  were  required.  But  the  culture  of  flax 
supposes  an  advanced  state  of  agriculture,  and  the  raising  of 
sheep  upon  a  large  scale  requires  security  from  wolves  and 
robbers.  The  last  condition  was  impossible,  where  nobles  and 
princes  were  engaged  in  incessant  quarrels  among  themselves 
and  with  the  cities.  The  cattle  of  the  pastures  were  always  the 
first  prey.  Moreover,  the  vast  forests,  which,  in  their  passion 
for  the  chase,  the  nobility  carefully  maintained,  made  the  ex 
trication  of  ferocious  animals  almost  impossible.  The  deficien 
cies  of  herds  and  flocks,  the  want  of  legal  security,  capital,  and 
liberty,  the  enslaved  condition  of  those  who  held  the  plough, 
as  well  as  the  want  of  interest  in  husbandry  among  the  owners 
of  the  soil,  arrested  necessarily  the  progress  of  agriculture,  and 
consequently,  the  industry  of  the  cities. 

With  these  views  before  us,  it  is  not  difficult  to  understand 
how  Flanders  and  Brabant,  in  very  different  circumstances, 
reached  at  an  early  day  so  high  a  degree  of  liberty  and 
prosperity. 

German  cities,  in  spite  of  these  obstacles,  flourished  upon  the 
Baltic  and  North  Sea,  by  the  aid  of  fisheries,  navigation,  and 
by  foreign  commerce  carried  on  by  sea ;  so  also,  some  cities  in 
upper  Germany,  near  the  foot  of  the  Alps,  under  the  influence 
of  Italy  and  Greece,  with  a  foreign  commerce  carried  on  by 
land ;  so  also,  some  on  the  banks  of  the  Rhine,  the  Elbe,  and 
the  Danube,  by  culture  of  the  vine,  and  trade  in  wine,  by 
the  wonderful  fertility  of  the  soil,  and  by  the  river  naviga 
tion,  which,  during  the  Middle  Ages,  when  roads  were  bad  and 
insecure,  was  of  more  importance  than  in  our  day. 


GERMANY.  149 

Diversity  of  origin  explains  the  diversity  of  associations 
which  existed  among  the  German  cities,  under  the  names  of 
Hanseatic,  Rhenish,  Suabian,  Dutch,  and  Swiss  Leagues. 

Strong  for  a  time  in  the  spirit  of  liberty  which  animated  them 
at  the  beginning,  these  associations  needed  a  guarantee  of  dura 
tion,  a  principle  or  cement  of  unity ;  separated  from  each  other 
by  the  possessions  of  the  nobility  and  the  servile  population  of 
the  country,  their  union  could  not  fail  to  be  severed,  soon  or 
late,  by  the  effect  of  continental  development  and  the  in 
creasing  wealth  of  the  rural  population,  among  whom  the  power 
of  the  princes  maintained  union.  By  promoting  and  securing 
the  prosperity  of  agriculture,  these  cities  contributed  to  their 
own  ruin,  for  they  failed  to  unite  with  either  the  rural  population 
or  the  nobility.  They  needed  for  that  purpose  more  intelligence, 
and  more  knowledge ;  but  their  political  views,  unfortunately, 
seldom  extended  beyond  their  walls. 

Two  of  those  leagues  only  realized  such  a  combination  of 
interests,  and  these  not  of  purpose,  but  by  force  of  circum 
stances  ;  we  mean  the  Swiss  Confederation  and  the  Seven  United 
Provinces ;  and  these  remain  to  this  day. 

The  Swiss  Confederation  is  nothing  else  than  an  agglomera 
tion  of  German  imperial  cities,  formed  and  cemented  by  the 
free  population  of  the  country  which  lies  between  them. 

The  others  owe  their  union  to  their  contempt  for  the  rural 
population,  to  that  foolish  pride  of  the  inhabitants  of  cities* 
which  induced  them  to  keep  the  people  of  the  country  in  a 
humble  condition,  instead  of  elevating  them. 

Cities  could  only  become  united  under  the  wing  of  hereditary 
monarchy.  But  monarchy  in  Germany  was  under  the  control 
of  princes  who,  that  their  wishes  might  not  be  counteracted, 
and  that  they  might  more  effectually  control  the  cities  and  the 
inferior  nobility,  were  interested  in  the  restraint  or  limitation 
of  hereditary  rights. 

We  can  see  why  the  idea  of  a  Eoman  Empire  was  kept  up 
among  the  German  nionarchs.  They  were  powerful  only  at  the 
head  of  armies ;  they  were  able  to  unite  princes  and  cities 
under  a  common  flag,  only  to  make  war  abroad.  For  this  reason 


150  HISTORY. 

municipal  liberty  was  favored  in  Germany,  whilst  in  Italy 
it  was  opposed  and  oppressed.  The  Roman  expeditions  not 
only  gradually  weakened  sovereign  authority  in  Germany,  but- 
even  ruined  those  dynasties,  which  might  have  succeeded  in 
establishing  compact  kingdoms  or  powers  within  the  Empire  and 
in  the  very  heart  of  the  country.  When  the  dynasty  of  Hohen- 
staufen  was  extinguished,  the  heart  of  the  country  was  broken 
into  a  thousand  pieces. 

The  feeling  that  it  was  impossible  to  reunite  these  broken 
remains,  led  the  House  of  Hapsburgh,  originally  so  weak  and  so 
destitute,  to  employ  the  national  power  to  found  in  the  south 
eastern  part  of  the  Empire  a  compact  hereditary  kingdom  by 
the  subjugation  of  foreign  tribes.  This  policy  was  followed  in 
the  north-east  by  the  Margraves  of  Brandenburg. 

Thus  were  founded  in  the  south-east  and  north-east  two 
hereditary  monarchies,  based  upon  the  subjugation  of  foreign 
tribes,  whilst  in  the  north-west  and  the  south-west  there  arose 
two  republics,  which  became  gradually  more  estranged  from 
Germany,  and  whilst  in  the  interior,  in  the  very  heart  of  the 
country,  this  extreme  subdivision  and  its  necessary  results, 
weakness  and  want  of  combination,  became  constantly  increasing 
evils. 

The  misfortunes  of  the  German  people  were  completed  by  the 
invention  of  powder  and  of  printing,  by  the  preponderance  of 
the  Roman  law,  by  the  Reformation,  and  finally  by  the  discovery 
of  America  and  the  new  route  to  India. 

The  moral,  social,  and  economical  revolution  which  followed 
begot  division  and  discord  in  the  Empire,  division  among  princes, 
division  among  cities,  division  even  among  the  citizens  of  the 
towns,  and  their  neighbors  of  every  condition.  The  energy  of 
nations  was  then  averted  from  manufacturing  industry,  from 
agriculture,  commerce,  and  navigation,  from  the  acquisition  of 
colonies,  from  the  improvement  of  institutions,  and  generally 
from  all  positive  amelioration ;  the  great  struggle  of  that  period 
was  for  dogmas  and  for  the  heritage  of  the  Church. 

The  Hanse  Towns  and  Venice  fell  during  that  time,  and  with 


GERMANY.  151 

them  the  foreign  commerce  of  Germany  and  the  power  and 
liberty  of  the  Northern  and  Southern  German  cities. 

The  thirty  years'  war  soon  after  extended  its  devastations  over 
all  the  countries  and  all  the  cities  of  Germany.  Holland  and 
Switzerland  were  detached,  and  the  fairest  portions  of  the 
Empire  were  conquered  by  France.  Mere  cities,  like  Stras- 
burg,  Nuremberg,  and  Augsburg,  which  formerly  had  sur 
passed  electorates  in  power,  were  then  reduced  to  insignificance 
by  the  system  of  standing  armies. 

If  the  cities  and  the  Imperial  authority  had  been  more  closely 
united  before  that  revolution,  if  a  prince,  exclusively  German, 
had  put  himself  at  the  head  of  the  Reformation,  and  had  estab 
lished  for  the  benefit  of  parties  thus  united,  the  power  and  the 
liberty  of  the  country,  the  agriculture,  manufacturing  industry, 
and  commerce  of  Germany  would  have  received  a  new  impulse 
and  another  development.  How  poor,  how  inapplicable,  in  the 
view  of  all  these  facts,  appears  the  economical  theory  which 
makes  the  prosperity  of  nations  to  depend  solely  upon  the  efforts 
of  individuals,  and  which  does  not  perceive  that  the  productive 
power  of  individuals  depends  in  a  great  measure  on  the  social 
and  political  state  of  the  country ! 

The  adoption  of  the  Roman  law  weakened  no  country  so  much 
as  Germany.  The  incredible  confusion  which  it  carried  into 
private  affairs  was  not  its  worst  consequence.  It  caused  a 
greater  evil  by  creating  a  class  of  learned  men  and  jurists, 
estranged  from  the  people  in  mind  and  language,  which  re 
garded  them  as  ignorant,  and  treated  them  as  children  who 
understood  not  the  value  of  common  sense ;  which  constantly 
substituted  secrecy  for  publicity,  and  which,  in  strict  alliance 
with  authority,  was  everywhere  its  organ  and  champion,  and 
everywhere  the  foe  of  liberty.  Thus  at  the  beginning  of  the 
eighteenth  century  we  still  find  barbarism  in  Germany — barbar 
ism  in  literature,  in  language,  in  legislation,  in  the  administra 
tion  of  justice,  in  the  government,  in  agriculture,  in  the  absence 
of  manufacturing  industry  and  foreign  commerce,  in  the  want 
of  national  unity  and  national  power;  on  every  side  we  find 
weakness  and  want  of  energy  in  what  concerns  other  countries. 


152  HISTORY. 

The  Germans  had  preserved  only  their  primitive  character ; 
their  taste  for  labor,  order,  economy,  and  moderation,  their 
perseverance  and  their  boldness  in  research  and  in  business, 
their  sincere  desire  for  whatever  was  good,  their  great  natural 
fund  of  morality,  caution,  and  thoughtfulness. 

Such  have  been  the  characteristics  of  the  governors  and  the 
governed.  When  nationality  had  almost  entirely  disappeared, 
and  when  the  people  began  to  enjoy  some  tranquillity,  an  effort 
was  commenced  in  every  special  territory,  to  organize,  to 
ameliorate,  to  advance.  In  no  other  countries  were  education, 
morality,  religious  sentiment,  art,  and  science,  the  object  of  so 
much  solicitude.  Absolute  power  was  nowhere  wielded  with 
such  moderation,  and  better  employed  in  the  propagation  of 
useful  knowledge,  and  in  the  maintenance  of  order  and  morality, 
in  the  repression  of  abuses  and  in  the  promotion  of  public  pros 
perity. 

The  basis  of  the  regeneration  of  German  nationality  was 
evidently  first  laid  by  the  governments  themselves  when  they 
conscientiously  applied  the  income  of  the  secularized  property 
to  education  and  public  instruction,  to  the  encouragement  of'., 
art,  science,  and  morality,  and  generally  to  objects  of  public 
utility.  It  is  in  this  way  that  knowledge  penetrated  the  govern 
ment,  the  administration  of  justice,  the  processes  of  agriculture, 
and  the  industrial  arts  and  commerce ;  and  in  this  way,  in  one 
word,  it  penetrated  the  masses  of  the  people. 

German  civilization  has,  therefore,  followed  quite  a  different 
path  from  that  in  other  countries.  Whilst  everywhere  else  high 
culture  of  the  mind  has  been  the  result  of  the  development  of 
industrial  energies,  the  development  of  industrial  power  or 
energy  in  Germany  has  been  the  consequence  of  the  moral  and 
intellectual  culture  which  had  preceded  it.  The  actual  civiliza 
tion  of  the  Germans  is,  so  to  speak,  theoretical.  Hence  that 
want  of  practical  aptness,  that  awkwardness  so  frequently 
noticed  by  foreigners.  They  are  like  an  individual  who,  having 
been  hitherto  deprived  of  the  use  of  his  limbs,  has  learned  theo 
retically  to  stand  and  to  walk,  and  has  just  commenced  the 
practice  of  these  functions.  Hence  their  infatuation  for  systems 


GERMANY.  153 

of  philosophy  and  cosmopolite  dreams.  Their  intelligence  which 
has  not  been  successful  in  the  affairs  of  life  has  attempted  to 
distinguish  itself  in  the  domain  of  speculation.  The  doctrines 
of  Adam  Smith  and  his  disciples  have,  therefore,  in  no  country 
found  a  better  reception  than  in  Germany ;  in  no  country  has 
the  free-trade  generosity  of  Canning  and  Huskisson  found 
more  confiding  friends. 

Germany  owes  her  first  progress  in  manufactures  to  the  revo 
cation  of  the  Edict  of  Nantes,  and  to  the  numerous  refugees 
driven  by  that  insane  measure  into  almost  every  part  of  Ger 
many,  who  established  numerous  manufactures  of  woollens, 
silk,  jewellery,  hats,  glass,  china,  gloves,  and  many  other  articles. 

The  first  public  steps  for  the  encouragement  of  manufactures 
in  Germany  were  taken  by  Austria  and  Prussia;  in  Austria, 
under  Charles  VI.  and  Maria  Theresa,  but  more  especially 
under  Joseph  II.  Austria  had  previously  suffered  considerable 
injury  by  the  expulsion  of  the  Protestants,  her  most  industrious 
inhabitants,  after  which  event  no  solicitude  for  knowledge  nor 
for  mental  culture  could  be  traced  in  Austrian  councils.  Never 
theless,  by  the  aid  of  protective  duties,  improvements  in  the 
rearing  of  sheep,  in  the  construction  of  roads,  and  by  aid 
of  other  encouragements,  the  industrial  arts  made  remarkable 
progress  as  early  even  as  the  reign  of  Maria  Theresa. 

That  progress  was  still  more  rapid  and  successful  under  the 
energetic  measures  of  Joseph  II.  It  is  true  that  at  first  the 
results  were  inconsiderable,  because  the  Emperor,  as  was  his 
custom,  precipitated  this  reform,  and  because  Austria  was  then 
very  far  behind  other  states.  It  was  then  seen  that  it  was  not 
best  to  attempt  too  much  at  once,  and  that  protective  duties,  to 
operate  conformably  to  the  nature  of  things,  and  so  as  not  to 
disturb  existing  relations,  must  not  be  too  high  in  the  beginning. 
But  the  longer  this  system  has  lasted,  the  more  has  its  wisdom 
been  revealed.  Austria  owes  to  it  her  present  splendid  industry 
and  the  prosperity  of  her  agriculture. 

The  industry  of  Prussia  had  suffered  more  than  that  of  any 
other  country  from  the  ravages  of  the  thirty  years'  war.  Her  prin 
cipal  manufacture,  that  of  cloths,  in  the  March  of  Brandenburg, 


154  HISTORY. 

had  been  almost  annihilated.  The  larger  part  of  the  manufac 
turers  had  emigrated  to  Saxony,  for  even  then  the  import  of 
English  goods  kept  down  every  branch  of  industry.  Happily 
for  Prussia,  the  revocation  of  the  Edict  of  Nantes  and  the  perse 
cution  of  the  Protestants  in  the  Palatinate  and  in  the  Bishopric 
of  Salsburg,  took  place  at  that  time. 

The  great  Elector  comprehended  now  at  a  glance  what  before 
had  been  so  clear  to  Elizabeth.  Attracted  by  him,  a  great 
number  of  the  fugitives  made  their  home  in  Prussia,  advancing 
its  agriculture,  introducing  by  their  skill  very  many  new 
branches  of  industry,  and  promoting  both  art  and  science.  His 
successors  followed  his  footsteps,  but  none  with  more  zeal 
than  that  great  king,  who  was  greater  by  his  wisdom  in  peace  than 
by  his  success  in  war.  It  is  not  here  necessary  to  enumerate  cir 
cumstantially  the  numberless  measures  by  which  Frederick  II. 
drew  to  Prussia  a  large  number  of  foreign  cultivators,  by  which  he 
improved  waste  lands,  encouraged  the  formation  of  meadows, 
the  culture  of  grasses,  of  animal  food,  vegetables,  potatoes,  and 
tobacco,  by  which  he  improved  the  breed  of  sheep,  cattle,  and 
horses,  furnished  mineral  manures,  etc.,  and  aided  agricultu 
rists  with  capital  and  credit.  If  he  encouraged  agriculture 
by  these  direct  means,  he  rendered  it  still  more  important  ser* 
vice  indirectly  by  promoting  home  manufactures  under  a  pro 
tective  system  established  with  that  view,  by  facilitating  the 
means  of  transportation,  and  by  the  institution  of  a  bank  of  land 
credit.  By  these  and  similar  measures  he  communicated  a  more 
powerful  impulse  to  the  progress  of  industry  in  Prussia  than  was 
felt  in  any  other  part  of  Germany.  The  geographical  situation 
of  the  country  and  its  division  into  separate  provinces,  were  far 
from  favoring  this  policy,  and  the  disadvantage  of  high  duties, 
as  manifested  at  times  in  the  pernicious  results  of  smuggling, 
must  have  been  much  more  injurious  than  in  large  states  bounded 
by  seas,  rivers,  or  chains  of  mountains. 

We  intend  not  by  this  eulogy  to  justify  the  faults  of  this 
system,  for  instance,  the  restrictions  upon  the  exportation  of 
raw  materials ;  but  the  powerful  impulse  it  gave  in  spite  of 
some  errors  to  Prussian  industry,  cannot  be  doubted  by  any 


GERMANY.  155 

enlightened  and  impartial  historian.  For  every  mind  free  from 
prejudice,  and  not  obscured  by  false  theories,  must  be  satisfied 
that  it  was  much  less  by  her  conquests  than  by  her  wise  policy 
in  the  promotion  of  agriculture,  manufactures,  and  commerce, 
and  by  her  progress  in  literature  and  science,  that  Prussia  has 
been  enabled  to  take  such  high  rank  among  European  powers. 
All  this  was  the  work  of  a  single  man,  one  man  of  genius. 

The  crown  was  not,  however,  supported  by  the  energy  of  free 
institutions :  it  was  sustained  indeed  by  a  conscientious  and  well- 
regulated  administration,  but  subjected  to  the  restraints  and 
hard  mechanism  of  a  hierarchical  bureaucracy. 

The  rest  of  Germany  had  remained  for  centuries  under  the 
influence  of  free  trade,  that  is,  manufactured  articles  and  other 
products  could  be  carried  into  Germany,  whilst  German  manu 
factures  were  excluded  from  almost  every  country  whence  these 
imports  came. 

To  this  rule  there  were  some  exceptions,  but  these  were  few. 
The  experience  of  Germany  should  not  be  cited  to  prove  the 
advantages  of  free  trade,  nor  to  fortify  the  doctrines  of  the 
school  of  political  economy,  which  makes  free  trade  its  cardinal 
doctrine ;  for  throughout  Germany  the  progress  was  retrograde, 
and  not  in  advance.  Such  cities  as  Augsburg,  Nuremberg, 
Mentz,  Cologne,  &c.,  number  now  less  than  the  third  or  the 
fourth  part  of  their  former  population.  War  with  them  was  at 
times  the  only  resource  for  disposing  of  a  surplus  of  valueless 
products. 

The  war  came  as  a  consequence  of  the  French  Revolution, 
and  with  it  came  the  subsidies  of  England  and  her  manufac 
turing  competition  upon  the  grandest  scale ;  hence  the  ruin  of 
manufactures  in  the  midst  of  an  increasing  but  merely  apparent 
and  transient  prosperity  of  agriculture. 

It  was  then  that  the  continental  blockade  of  Napoleon  oc 
curred  to  form  an  era  in  the  history  of  German,  as  well  as  in 
that  of  French  industry,  though  J.  B.  Say,  the  most  celebrated 
disciple  of  Adam  Smith,  has  stigmatized  it  as  a  calamity.  It 
is  acknowledged,  however,  in  spite  of  theorists,  and  particu 
larly  of  English  theorists,  all  those  who  are  acquainted  with 


156  HISTORY. 

German  industry  bear  witness,  and  all  enlightened  statists  fur 
nish  the  evidence,  that  with  that  blockade  commenced  the 
upward  impulse  of  German  manufactures  of  every  kind ;  the  pro 
gress  in  the  breeding  of  sheep  previously  begun,  became  then 
distinctly  visible;  the  improvement  of  the  means  of  com 
munication  received  then,  for  the  first  time,  due  consideration. 
It  is  true  that  Germany  lost,  in  great  part,  her  former  export 
trade,  especially  in  linens ;  but  the  new  profits  largely  exceeded 
the  loss,  especially  for  the  manufactures  of  Prussia  and  Austria, 
which  had  got  the  start  of  all  others  in  Germany. 

At  the  return  of  peace,  the  manufacturers  of  England  re 
newed  or  continued  their  formidable  competition  with  those  of 
Germany ;  for  during  a  period  of  reciprocal  restraint  new  inven 
tions  and  the  almost  exclusive  possession  of  the  market  of  the 
world,  had  given  them  an  immense  superiority ;  better  provided 
with  capital,  they  could  furnish  better  goods,  and  at  lower  prices, 
and  give  much  longer  credits  than  the  Germans,  who  had  still 
to  struggle  against  the  difficulties  of  a  commencement.  A 
general  ruin  and  great  distress  ensued  among  the  latter,  and 
especially  among  the  manufacturers  of  the  lower  Rhine,  that 
region,  which,  having  been  for  many  years  attached  to  France, 
was  now  shut  out  from  the  market  of  that  country.  The  former 
Prussian  tariff  had  undergone  many  modifications  in  the  direc 
tion  or  interest  of  absolute  free  trade,  but  had  proved  no  suffi 
cient  protection  against  English  competition.  Prussian  bureau 
cracy,  however,  resisted  for  a  long  time  all  demand  for  assistance. 
It  had  been  too  deeply  imbued  through  its  universities  with  the 
theory  of  Adam  Smith,  to  comprehend  promptly  the  wants  of 
the  time.  There  were  in  Prussia  at  that  time  economists  who 
dared  even  to  propose  the  resuscitation  of  the  Physiocratic 
system,  then  dead  many  years. 

But  here  again  the  nature  of  things  was  stronger  than  theory. 
A  deaf  ear  could  no  longer  be  turned  to  a  cry  of  distress 
coming  from  manufacturers,  the  more  especially  when  that  cry 
came  from  the  industry  of  a  country  which  longed  for  its  former 
union  with  France,  and  in  which  it  was  important  for  Prussia  to 
maintain  a  good  feeling.  The  opinion  was  then  gaining  ground 


GERMANY.  157 

that  the  English  government  favored  very  efficiently  the  inunda 
tion  of  the  continental  markets  with  manufactured  goods,  for  the 
purpose  of  smothering  in  the  cradle  the  infant  manufactures  of 
the  continent.  That  opinion  has  been  ridiculed  ;  but  it  was  not 
surprising  that  such  opinions  prevailed,  as  the  conduct  of  Eng 
land  was  precisely  that  which  such  a  policy  dictated.  The 
inundation  took  place  precisely  as  if  predetermined ;  an  illus 
trious  member  of  parliament,  Henry  Brougham,  afterwards 
Lord  Brougham,  had  plainly  declared  in  1815,  that  "  England 
could  afford  to  incur  some  loss  on  the  export  of  English  goods, 
for  the  purpose  of  destroying  foreign  manufactures  in  their 
cradle."  That  thought  of  a  man,  since  so  celebrated  as  a 
cosmopolite  and  liberal  philanthropist,  was  ten  years  later  re 
produced,  almost  in  the  same  terms,  by  another  member  of 
parliament,  not  less  famed  for  his  liberal  views,  Mr.  Hume,  who 
also  desired  "  that  the  manufactures  of  the  continent  should  be 
strangled  in  the  cradle." 

The  petition  of  the  Prussian  manufacturers  was  heard  at  last, 
rather  late,  it  is  true,  for  they  had  been  for  years  struggling 
between  life  and  death,  and  the  evil  was  corrected  by  the  hand 
of  a  master.  The  Prussian  tariff  of  1818  met,  at  the  time  of 
its  enactment,  all  the  wants  of  Prussian  industry,  without  unduly 
increasing  the  required  protection,  without  restricting  the  need 
ful  relations  of  Prussia  with  foreign  countries.  This  tariff  was 
very  much  more  moderate  in  its  duties  than  the  tariffs  of  Eng 
land  and  France,  as  it  should  have  been ;  for  the  object  was  not 
to  pass  by  degrees  from  the  prohibitive  to  the  protective  system, 
but  from  what  is  called  free  trade  to  protection:  Another  emi 
nent  merit  of  that  tariff,  considered  as  a  whole,  was,  that  the 
duties  were  chiefly  specific  according  to  the  weight,  and  not 
ad  valorem.  Smuggling  and  under-valuatiou  were  thus  not  only 
prevented,  but  another  great  end  was  attained ;  articles  of 
general  consumption,  which  every  country  can  most  easily 
manufacture  for  itself,  the  home  production  of  which  was  the 
more  important  on  account  of  the  high  figure  of  its  total  value, 
were  visited  with  the  heaviest  duties,  these  protective  duties 
being  reduced  in  proportion  to  the  fineness  and  higher  price  of 


158  HISTORY. 

the  goods ;  consequently  the  temptation  as  well  as  the  possibility 
of  smuggling  existed  only  where  there  was  little  or  no  inter 
ference  with  home  industry. 

This  system  of  specific  duties  by  weight,  as  may  be  readily 
imagined,  bore  more  heavily  upon  the  trade  with  other  German 
States,  than  upon  the  foreign  trade.  The  small  interior  States 
of  Germany,  already  excluded  from  the  markets  of  Austria, 
France,  and  England,  were  also  almost  entirely  excluded  from  the 
markets  of  Prussia.  This  blow  was  the  more  sensibly  felt,  be 
cause  many  qf  them  were  wholly  or  partially  enclosed  by  pro 
vinces  of  Prussia. 

The  same  measures  which  had  appeased  the  Prussian  manu 
facturers  excited  painful  sensations  among  those  of  the  rest  of 
Germany.  Austria  had  but  recently  taxed  the  importation  of 
German  products  into  Italy,  especially  the  linens  of  Upper 
Swabia.  Kestricted  on  all  sides  to  the  markets  of  the  small 
States,  and  separated  from  each  other  by  lines  of  custom-houses, 
the  manufacturers  of  these  States  were  in  a  condition  of  ex 
treme  distress. 

It  was  this  extremity  which  induced  the  establishment,  in 
1819,  of  the  association  of  five  or  six  thousand  German  manu 
facturers  and  merchants,  at  the  Spring  Fair  of  Frankfort  on 
the  Main,  for  the  double  purpose  of  abolishing  internal  customs 
and  of  establishing  in  Germany  a  common  system  of  commerce 
and  customs. 

This  association  assumed  a  regular  organization.  Its  statutes 
were  submitted  to  the  approbation  of  the  German  Diet,  as  well 
as  of  all  the  princes  and  all  the  governments  of  Germany.  It 
had  in  each  German  city  a  local  correspondent ;  in  each  country 
a  provincial  correspondent.  All  the  members  and  all  the  cor 
respondents  bound  themselves  to  labor  with  all  their  abilities 
and  means  for  the  common  object.  The  city  of  Nuremberg 
was  chosen  as  the  centre  of  the  association,  and  was  authorized 
to  name  a  central  committee  charged  with  the  direction  of  its 
affairs,  with  the  aid  of  an  agent,  a  function  to  which  the  writer 
of  this  volume  was  called.  A  weekly  paper,  entitled,  The 
Organ  of  the  Trade  and  Manufactures  of  Germany,  gave  pub- 


GEKMANY.  159 

licity  to  the  debates  and  the  proceedings  of  the  central  com 
mittee,  as  well  as  to  all  reports,  propositions,  statistical  exhibits, 
and  notices  touching  the  ends  of  the  association.  Every  year  a 
general  meeting  took  place  at  the  Fair  of  Frankfort,  to  hear  the 
report  of  the  committee.* 

After  the  association  had  addressed  to  the  German  Diet  a 
petition  in  which  the  necessity  and  the  utility  of  the  measures 
proposed  by  it  were  established,  the  central  committee  at  Nu 
remberg  commenced  their  work.  It  sent  immediately  a  depu 
tation  to  all  the  German  courts,  also  to  the  ministerial  congress, 
held  at  Vienna  in  1820.  The  result  reached  at  this  congress 
was,  that  several  of  the  smaller  States  agreed  to  hold  a  special 
congress  upon  this  subject  at  Darmstadt.  The  debates  which 
took  place  in  this  last  assembly,  led  first  to  an  association  be 
tween  Wurtemburg  and  Bavaria ;  then  to  the  union  of  certain 
German  States  with  Prussia ;  then  to  that  of  the  central  States 
of  Germany ;  and  then  lastly,  and  chiefly  owing  to  the  efforts 
of  Baron  Gotta,  to  the  blending  of  these  three  customs'  confe 
derations  ;  so  that,  with  the  exception  of  Austria,  of  the  two 
Mecklenburgs,  of  Hanover,  and  the  Hanseatic  cities,  the  whole 
of  Germany  is  united  in  a  joint  tariff  association,  the  Zoll- 
Verein,  which  has  suppressed  internal  custom-houses,  and  estab 
lished  against  foreign  countries  a  common  rate  of  duties,  the 
product  of  which  is  apportioned  among  the  particular  States, 
according  to  their  population. 

The  tariff  of  that  association  is  substantially  the  Prussian 
tariff  of  1800 ;  that  is  to  say,  a  moderate  protection. 

Under  the  influence  of  this  association,  the  manufacturing 
industry,  commerce,  and  agriculture  of  the  German  States 
which  it  embraces,  have  already  achieved  an  immense  progress. 

*  To  the  untiring  zeal  and  ability  of  List  in  this  agency  and  otherwise, 
Germany  owes  much  of  that  prosperity  which  the  Zoll-Verein  has  secured 
to  her.  He  has  stated  his  agency  in  the  great  work  of  forming  the  ZoU- 
Verein  far  more  modestly  than  justice  to  himself  required.  —  [S.  C.] 


160  HISTORY. 

CHAPTER  VIII. 
RUSSIA. 

RUSSIA  owes  her  first  progress  in  civilization  and  industry  to 
her  relations  with  Greece ;  then  to  the  commerce  of  the  Hanse 
Towns  with  Novogorod ;  and  after  John  Wassiliewitsch  had  de 
stroyed  that  city,  and  the  route  by  the  coasts  of  the  White  Sea 
had  been  discovered,  to  her  commerce  with  England  and 
Holland. 

The  main  impulse  of  her  industry,  as  well  as  her  civilization, 
dates,  however,  no  higher  than  the  reign  of  Peter  the  Great. 
The  history  of  Russia,  during  the  past  one  hundred  and  forty 
years,  furnishes  a  manifest  proof  of  the  powerful  influence 
which  national  unity  and  political  institutions  exercise  over  the 
economical  prosperity  of  nations.  It  is  to  that  imperial  autho 
rity  which  has  established  and  maintained  unity  among  a  multi 
tude  of  barbarian  hordes,  that  Russia  owes  the  rise  and  progress 
of  her  manufactures ;  the  rapid  advance  of  her  agriculture  and 
population ;  the  development  of  her  internal  trade  by  the  aid 
of  canals  and  roads ;  a  vast  external  commerce ;  and,  in  one 
word,  all  her  industrial  and  commercial  importance. 

The  commercial  system  of  Russia  dates  no  farther  back  than 
1821.  Under  Catharine  II.,  the  advantages  accorded  to  foreign 
manufacturers  had  not  been  without  some  benefit  to  various 
trades  and  industries ;  but  the  nation  was  still  too  far  behind 
in  general  culture  to  attain  to  more  than  the  first  rudiments  in 
the  manufacture  of  linen,  iron,  glass,  etc.,  and  generally  in 
those  branches  of  industry  for  which  the  country  was  best  fitted 
by  her  agricultural  and  mineral  productions. 

Greater  progress  in  manufactures  was,  however,  not  then  con 
formable  with  the  commercial  interest  of  the  country.  If  foreign 
nations  had  received  in  payment  the  food,  the  raw  materials, 
and  the  common  manufactured  products,  which  Russia  was  then 


RUSSIA.  161 

able  to  furnish ;  if  there  had  been  no  wars,  nor  exterior  compli 
cations,  Russia  might  have  for  a  long  time  derived  greater 
advantage  from  continuing  dependent  upon  countries  more  ad 
vanced  ;  her  general  culture  would  have  been  more  developed 
by  such  relations  than  by  the  manufacturing  system.  But  pro 
tracted  wars,  the  continental  blockade,  and  the  restrictive 
measures  of  foreign  nations  compelled  that  empire  to  seek  its 
advantage  in  a  better  policy  than  the  export  of  raw  materials, 
and  the  import  of  manufactured  products.  These  events  inter 
rupted  the  ancient  maritime  relations  of  Russia.  The  overland 
trade  with  the  western  portion  of  the  continent,  could  not  in 
demnify  her  for  that  loss.  She  was  therefore  obliged  to  work 
up  her  own  raw  materials. 

After  the  restoration  of  general  peace,  the  inclination  was  to 
return  to  the  old  policy.  The  government,  the  Czar  himself, 
had  a  penchant  for  free  trade.  The  writings  of  Storch  enjoyed 
in  Russia  no  less  authority  than  those  of  Say  in  Germany. 
The  Russian  government  did  not  fear  the  shock  which  their 
domestic  manufactures,  grown  up  under  the  protection  of  the 
continental  system,  would  encounter  from  English  competition. 
This  shock  once  past,  declared  the  theorists,  the  beatitudes  of 
free  trade  must  soon  be  tasted.  The  commercial  conjunctures 
were  indeed  very  favorable  to  transition.  The  bad  crop  of 
Western  Europe  had  stimulated  a  heavy  export  of  agricultural 
products,  and  Russia  had  thus  for  some  time  abundant  means 
of  paying  for  considerable  importations  of  foreign  manufactured 
pro.ducts. 

But  when  this  extraordinary  demand  for  the  agricultural 
products  of  Prussia  ceased,  and  on  the  other  hand  when  England 
had,  for  the  benefit  of  her  aristocracy,  restricted  the  importation 
of  grain;  and  for  the  advantage  of  Canada,  that  of  foreign 
timber,  the  ruin  of  the  manufactures  of  Russia  and  the  excess 
of  the  importation  of  manufactured  products  was  doubly  felt. 
After  having  with  Storch  regarded  the  balance  of  trade  as  a 
chimera,  the  existence  of  which  it  was  as  shameful  and  as 
ridiculous  for  intelligent  and  well-educated  men  to  admit  as  the 
existence  of  witches  in  the  seventeenth  century,  the  time  arrived 
11 


162  HISTORY. 

when  it  was  impossible  to  deny  what  was  so  terribly  experienced, 
that  among  independent  nations  something  was  occurring  very 
like  an  unfavorable  commercial  balance.  The  most  clear-sighted 
and  profound  statesman  of  Russia,  Count  Nesselrode,  did  not 
hesitate  to  avow  it  publicly.  In  an  official  circular  of  1821,  he 
declared  that  Russia  "is  compelled  by  circumstances  to  recur  to 
a  system  of  independent  commerce ;  that  the  products  of  the 
Empire  found  no  market  abroad;  that  the  manufactures  of 
Russia  were  ruined,  or  upon  the  verge  of  ruin ;  that  the  money 
of  the  country  was  being  carried  off  into  foreign  parts,  and  that 
the  most  solid  commercial  establishments  were  at  the  brink  of 
destruction." 

The  salutary  effects  of  the  protective  system  adopted  by  Russia 
aided  not  less  than  the  disastrous  consequences  of  the  restora 
tion  of  free  trade  to  discredit  the  doctrines  and  assertions  of 
mere  theorists.  Capital,  talent,  and  labor  flowed  in  from  all 
the  civilized  countries,  especially  from  England  and  Germany, 
attracted  by  the  advantages  offered  to  domestic  manufactures. 
The  nobility  too,  profited  largely  by  the  imperial  policy.  Not 
finding  abroad  any  market  for  her  products,  Russia  attempted 
to  solve  the  reverse  of  the  problem  by  bringing  the  markets  near 
to  the  products.  She  established  manufactures  upon  her  own 
domain.  The  demand  for  fine  wool  occasioned  by  the  woollen 
manufactures  thus  created,  had  the  effect  of  rapidly  increasing 
and  improving  her  sheep  husbandry.  Commerce  at  large 
increased  instead  of  diminishing  under  this  policy,  especially 
commerce  with  Persia,  China,  and  other  neighboring  countries 
in  Asia.  Commercial  revulsions  came  to  an  end,  and  it  suffices 
to  examine  the  last  reports  of  the  department  of  commerce  in 
Russia,  to  be  convinced  that  Russia  owes  to  that  system  her 
high  degree  of  prosperity,  and  that  she  is  advancing  with  gigan 
tic  strides  in  a  career  of  wealth  and  power.  It  would  be 
foolish  for  Germany  to  attempt  any  diminution  of  this  progress, 
and  to  complain  of  the  injury  which  the  Russian  system  has 
inflicted  upon  North-Eastern  Germany.  A  nation,  like  an 
individual,  has  no  interests  more  precious  than  its  own.  Russia 
is  not  responsible  for  German  prosperity.  Let  Germany  look  to 


RUSSIA.  163 

the  interests  of  Germany,  let  Russia  take  care  of  Russia. 
Instead  of  repining,  instead  of  feeding  upon  hopes  and  waiting 
for  the  millennium  of  future  free  trade,  it  would  be  better  to  cast 
into  the  fire  the  cosmopolite  system,  and  to  learn  wisdom  from 
the  example  of  Russia. 

It  is  very  natural  that  England  should  regard  with  a  jealous 
eye  the  commercial  policy  of  Russia,  for  Russia  has  thus  escaped 
the  domination  of  England,  she  has  thus  even  taken  the  posture 
of  competing  with  England  in  Asia.  If  England  manufactures 
at  a  lower  price,  this  advantage  is  compensated  in  the  commerce 
with  the  interior  of  Asia,  by  the  nearness  of  the  market  and  the 
political  influence  of  the  Empire.  If  relatively  to  Europe,  Rus 
sia  is  still  little  cultivated ;  relatively  to  Asia,  she  is  a  civilized 
country. 

It  cannot  be  denied,  however,  that  the  want  of  civilization 
and  proper  political  institutions  may  hereafter  prove  a  great 
obstacle  to  the  advance  of  Russia  in  industry  and  commerce, 
unless  the  Imperial  government  should  succeed  in  advancing 
general  civilization  in  accordance  with  the  claims  of  industry, 
by  establishing  good  municipal  and  provincial  organizations,  by 
first  regulating,  and  then  completely  abolishing  all  servitude, 
by  creating  a  middle  class  of  educated  men  and  free  peasants, 
by  improving  the  methods  of  interior  communication,  and  finally 
by  facilitating  the  means  of  transportation  to  Asia.  Such  are 
the  measures  which  Russia  has  to  accomplish  within  this  century, 
such  is  the  condition  of  her  further  progress  in  agriculture, 
manufacturing  industry,  as  well  as  in  commerce,  mercantile 
navigation,  and  naval  power.  But  that  such  reforms  may  be 
possible,  that  they  may  be  accomplished,  it  is  necessary  that  the 
Russian  nobility  comprehend  that  their  material  interests  are 
closely  connected  with  them.* 

*  As  a  fitting  appendix  to  the  chapter,  I  give  the  following  extract  from 
a  work  published  in  1845,  in  the  German  language,  with  the  title,  The 
Economy  of  Human  Society,  by  the  late  Count  Cancrin,  who,  for  twenty 
years,  directed  the  finances  of  Russia.  —  [H.  R.] 

"There  has  been  much  declamation  against  what  is  called  the  close 


164  HISTORY. 

system  of  Russia.    Let  me  be  allowed  a  few  words  of  explanation  upon  the 
true  state  of  things. 

"  Long  before  the  reign  of  Catharine  II.,  who  continued  the  work  of 
Peter  the  Great,  in  Europeanizing  everything  in  Russia,  protective  duties  had 
been  resorted  -to  in,tltat  Empire:  at  the  epoch  of  the  Congress  of  Vienna 
there  existed,  W*  complete  system  of  protection,  partly  by  prohibitions, 
having  for  its  object  the  restraint  of  luxury  and  the  retaining  of  the  money 
in  the  country.'. ..'• 

"  In  treaties  of  peace,  subsequently  concluded,  diplomatists  inserted 
articles  upon  the  subject  of  free  trade  little  suited  to  the  condition  of  Rus 
sia.  Thence  came  the  liberal  tariff  of  1819,  under  the  operation  of  which 
Russia  was  inundated  with  foreign  merchandize,  and  many  branches  of 
manufacture  were  ruined  or  were  on  the  verge  of  ruin.  It  was  felt  that 
this  system,  however  it  increased  the  revenue  by  customs,  could  not  be 
endured ;  industry  was  loud  in  its  complaints,  and  in  1821  a  new  tariff  was 
decreed,  with  heavier  duties  and  some  prohibitions. 

"The  Author  found  this  tariff  in  force  in  1823,  when  he  was  named 
minister  of  finance.  He  continued  it  with  corrections  and  improvements ; 
he  abolished  some  prohibitions,  he  reduced  some  duties,  he  increased  others 
with  a  view  to  revenue  or  protection,  he  modified  the  custom-house  regula 
tions  in  some  respects.  He  is  not,  therefore,  the  founder  of  the  protective 
system  in  Russia. 

"  That  this  system  does  not  restrain  commerce  in  an  undue  degree,  is 
proved  by  the  annual  receipts,  which  have  increased  three-fold  since  1823, 
of  which  a  considerable  portion  is  furnished  by  articles  of  foreign  manufac 
ture.  Whence,  then,  all  these  clamors  ? 

"  Until  1823,  the  government  had  not  succeeded  in  suppressing  the  con 
traband  trade  upon  the  western  frontier,  which  was  carried  on  with  great 
profit  to  the  countries  on  that  boundary.  Not  only  on  the  lines  of  the 
custom-houses,  but  even  in  the  offices  and  in  the  ports,  this  smuggling  was 
carried  on  upon  a  large  scale.  There  was  an  understanding  with  the  col 
lectors,  and  fraudulent  invoices  were  currently  employed  to  facilitate  the 
business.  In  this  way  the  protective  system  was  eluded,  and  the  honest 
merchant  could  not  obey  the  law  without  ruin  ;  he  was  afterwards  very 
thankful  for  the  privilege  of  being  honest. 

"  The  Author  changed,  in  great  part,  the  officers  and  persons  in  these 
custom-houses ;  a  good  post  in  this  service  had  become  a  fortune.  The 
revenue  officers  and  their  assistants  were  placed  upon  a  regular  footing, 
properly  organized,  and  amounted  upon  the  European  line  of  the  Russian 
customs  to  about  nine  thousand  chosen  men,  foot  and  horse.  There  were 
twenty  thousand  on  the  frontiers  of  France.  The  guards  were  selected 
from  the  soldiers  who  had  served  out  their  time.  Against  fraudulent 
invoices  a  government  stamp  was  employed,  and  smuggled  goods  were 
pursued  into  the  interior  by  skilful  officers  and  faithful  adepts.  By  means 


RUSSIA.  165 

of  these  measures  smuggling  and  frauds  upon  the  revenue  were  reduced  to 
very  small  proportions ;  and  it  was  not  by  rendering  access  to  Russia  diffi 
cult,  as  all  travellers  can  attest  that  they  were  in  no  country  treated  with 
more  politeness  and  indulgence ;  it  was  only  thoseperpetual  goers  and 
comers  in  the  smuggling  business  who  met  with /Irou^l^^ttje  frontier. 
And  as  the  result,  the  aggregate  of  the  commerce  alojfg  tKe  w^J^ine  has 
been  remarkably  increased.  •  */.  /f  \ 

"Smuggling  became  so  dangerous,  insurance  ^^x^MTiVe 
articles  could  no  longer  be  ventured  in  this  contrabaOT4r{fd^j 
prizes,  which,  at  the  first,  had  been  considerable,  dimfofsjied  b 
a  very  small  number.  The  smuggling  trade  was  ruined.  HJQS  i 
Certain  people  in  the  countries  neighboring  to  Russia  having  invested 
largely  in  contraband  goods  and  facilities,  incurred  heavy  losses,  and  thence 
the  complaints  which  have  so  abounded  in  journals  and  books.  It  has  been 
said,  and  repeated  again  and  again,  that  the  manufacturing  industry  of 
Russia  has  merely  an  artificial  existence ;  the  liberals,  the  ardent  friends 
of  humanity,  take  exception  to  the  policy  of  Russia,  and  make  bitter  com 
plaints  because  she  is  more  occupied  with  her  own  interests  than  she  is 
with  the  interests  of  other  nations ;  yet  notwithstanding  all  their  clamors, 
the  system  of  repression  of  which  they  complain  does  not,  properly  speak 
ing,  exist.  List  has  told  the  truth.* 

"  Another  of  these  false  allegations  is  that  Russian  industry  lives  by  the 
aid  of  sacrifices  made  by  the  government.  It  is  strong  of  itself,  and  for  the 
last  twenty-five  years  the  government  has  given  no  important  sum  to  sus 
tain  any  branch  of  industry.  Since  1823  other  means  have  been  used  to 
promote  and  encourage  domestic  industry,  such  as  —  a  commercial  gazette,  a 
journal  of  manufactures ;  agents  abroad  to  ascertain  and  report  all  new 
discoveries,  inventions  and  processes ;  the  exhibition  of  samples,  the 
employment  of  skilful  foreigners,  a  council  of  manufacturers  with  its 
sections  and  correspondents,  a  grand  technological  institute,  industrial 
schools,  the  sending  young  men  abroad  as  learners,  periodical  exhibitions 
of  the  products  of  industry  at  Moscow  and  St.  Petersburg,  with  rewards 
for  merit,  gratuitous  schools  of  design,  regulations  to  improve  the  police  of 
labor,  and  many  other  measures  too  numerous  to  mention.  All  this  has 
contributed  to  increase  intelligence  and  zeal ;  that  is,  intellectual  capital, 
to  perfect  the  modes  of  operation,  to  develop  the  tendencies  of  the  people, 
finally,  to  carry  the  national  industry  to  the  point  at  which  it  has  arrived, 
and  to  reduce  prices  in  an  important  degree.  If  that  industry  is  yet  behind 
in  very  fine  qualities  of  goods,  it  has  succeeded  perfectly  in  the  good 
qualities  of  the  more  common  articles  of  consumption.  The  ordinary  cloths 
of  Russia  are  better  than  those  of  France,  and  cost  no  more.  The  spinning 
and  weaving  of  cotton  fabrics  are  making  good  progress.  As  to  silks,  there 

*  Alluding  to  an  opinion  of  List,  the  author  of  this  volume,  in  some  one  of  his  many 
works  on  political  economy. 


166  HISTORY. 

CHAPTER  IX. 
UNITED  STATES  OF  NORTH  AMERICA. 

HAVING  traced,  with  their  history  before  us,  the  commercial 
policy  of  the  nations  of  Europe,  at  least  of  those  from  which  we 
have  something  to  learn,  let  us  turn  our  eyes  across  the 
Atlantic,  towards  a  nation  of  colonists,  which,  in  our  own  day, 
has  arisen  from  the  complete  subjection  of  colonial  dependence, 
and  from  the  condition  of  separate  provinces,  united  by  no 
political  bond,  to  that  of  a  compact,  well-organized,  free,  power 
ful,  industrious,  rich,  and  independent  nation,  in  which  our 
grandsons  may  yet  see  the  first  maritime  and  commercial  power 
of  the  world. 

The  commercial  and  industrial  history  of  North  America  is 
more  instructive  than  any  other  from  our  point  of  view ;  the 
development  there  is  rapid ;  the  periods  of  free  trade  and  regu 
lated  trade  follow  each  other  in  rapid  succession ;  the  results 
are  plainly  marked ;  and  the  whole  mechanism  of  national  in 
dustry  and  public  administration  is  entirely  open  to  the  eye  of 
every  observer. 

The  colonies  of  North  America  were  held  by  the  mother 
country,  in  regard  to  manufactures,  in  such  absolute  subjection, 

is  little,  except  at  Lyons,  which  Russia  cannot  rival.  St.  Petersburg  and 
Moscow  are  filled  with  manufactories ;  the  bronzes "  of  St.  Petersburg,  if 
inferior  in  design  to  those  of  France,  are  of  more  solid  workmanship,  better 
finished,  and  very  little  higher  in  price.  If,  then,  writers  (I  mention  no 
names)  seriously  assert  that  Russian  industry  has  only  an  artificial  existence, 
they  must  be  regarded  as  being  specially  under  the  epidemic  influence  of 
the  reveries  of  free  trade." 

To  this  extract  from  the  work  of  Cancrin,  Richelot  adds  the  information 
that  since  then  several  modifications  have  been  made  in  the  Russian  tariff 
in  the  interest  of  commerce,  without,  however,  withdrawing  protection  from 
the  active  branches  of  Russian  industry,  and  that  quite  an  important 
reduction  of  duties  had  been  made  in  November,  1850,  upon  the  finer 
articles  of  French  fabric.  —  [S.  C.] 


UNITED    STATES    OF    NOKTH    AMERICA.         167 

that  besides  the  common  domestic  industry  and  the  ordinary 
mechanical  employments,  no  kind  of  manufacture  was  permitted. 
In  1750,  a  manufactory  of  hats  in  Massachusetts  drew  the  at 
tention,  and  excited  the  jealousy  of  parliament;  all  colonial 
manufactories  were  declared  to  be  common  nuisances,  not  ex 
cepting  even  forges,  in  a  country  possessing  in  abundance 
every  element  for  the  manufacture  of  iron.  In  1770,  the  great 
Chatham,  alarmed  by  the  first  manufacturing  attempt  of  New 
England,  declared  that  the  colonies  ought  not  to  be  allowed  to 
manufacture  so  much  as  a  hob-nail. 

Adam  Smith  has  the  merit  of  being  the  first  to  denounce  the 
iniquity  of  that  policy. 

The  monopoly  of  manufacturing  industry  by  the  mother 
country,  was  one  of  the  principal  causes  of  the  American  revolu 
tion  ;  the  tax  upon  tea  was  only  the  immediate  cause  of  the 
explosion. 

Freed  from  the  trammels  which  had  been  imposed  upon  them, 
in  possession  of  all  the  material  and  intellectual  conditions 
needful  for  manufacturing  industry,  separated  from  the  country 
whence  they  had  drawn  manufactured  articles,  and  where  they 
sold  their  raw  material;  reduced,  consequently,  to  their  own 
resources  for  the  supply  of  their  wants,  the  States  of  North 
America  found,  during  the  war  of  independence,  that  manufac 
tures  of  every  kind  had  received  a  remarkable  impulse,  and  that 
agriculture  was  deriving  from  them  such  benefits,  that  the  value 
of  the  soil,  as  well  as  the  wages  of  labor,  were  largely  increased, 
in  spite  of  public  taxes  and  the  ravages  of  war.  After  the 
peace  of  Paris,  the  old  confederation  having  no  provision  for 
the  establishment  of  a  common  system  of  commerce,  the 
manufactured  products  of  England  again  found  an  open 
door,  and  encountering  the  infant  manufactures  of  America 
in  free  competition,  the  latter  being  unable  to  sustain  themselves, 
the  industry  which  had  sprung  up  and  prospered  during  the  war 
was  extinguished,  and  vanished  even  more  quickly  than  it  had 
appeared. 

A  member  of  Congress  once  said  in  his  place,  speaking  of 
that  crisis,  "  We  bought,  according  to  the  doctrine  of  modern 


168  HISTORY. 

theorists,  where  we  could  purchase  cheapest,  and  were  soon  in 
undated  with  foreign  commodities ;  English  goods  were  sold  at 
lower  rates  in  our  maritime  cities  than  at  Liverpool  and  London. 
Our  manufacturers  were  ruined ;  our  merchants,  even  those  who 
had  hoped  to  enrich  themselves  by  importation,  became  bank 
rupt  ;  and  all  these  causes  united  had  such  a  disastrous  influ 
ence  upon  agriculture,  that  a  general  depreciation  of  real  estate 
followed,  and  failure  became  general  among  proprietors."  This 
state  of  things  was  unfortunately  not  for  a  moment ;  it  lasted 
from  the  peace  of  Paris  to  the  adoption  of  the  Federal  Consti 
tution.  This  circumstance,  more  than  any  other,  impelled  the 
various  States  to  draw  closer  the  bonds  of  political  union,  and 
to  grant  all  needful  powers  to  Congress  to  establish  a  uniform 
system  of  commerce  for  all.  From  every  State,  not  excepting 
even  New  York  and  South  Carolina,  Congress  was  beset  with 
petitions  for  the  protection  of  home  industry ;  and,  on  the  day 
of  his  inauguration,  Washington  wore  a  coat  of  domestic  cloth, 
giving,  by  this  expressive  simplicity,  so  characteristic  of  that 
great  man,  according  to  a  New  York  journal  of  that  day,  "  to 
his  successors  and  to  legislators  of  after-time,  an  indelible  lesson 
as  to. the  means  of  promoting  national  prosperity."  Although 
by  the  first  American  tariff,  that  of  1789,  but  light  duties  were 
imposed  upon  the  most  important  manufactured  articles,  the  re 
sults  were  so  happy,  that  Washington  was  able,  in  his  message 
of  1791,  to  congratulate  the  nation  on  the  flourishing  state  of 
its  manufactures,  its  agriculture,  and  its  commerce. 

The  insufficiency  of  that  protection  was  soon  discovered ;  the 
obstacle  of  a  low  duty  was  easily  overcome  by  the  manufacturers 
of  England,  they  being  in  a  state  of  progress.  Congress  raised 
the  duties  upon  the  most  important  articles,  to  fifteen  per  cent. ; 
but  this  was  in  1804,  when  the  receipts  from  customs  were  re 
duced  to  such  a  low  figure,  that  it  became  necessary  to  increase 
the  revenue.  For  some  time  before,  the  manufacturers  of  the 
country  had  exhausted  themselves  in  complaints  of  the  want  of 
protection,  the  opposing  interests  being  as  loud  in  proclaiming 
the  advantages  of  free  trade,  and  in  setting  forth  the  disadvan 
tages  of  high  protective  duties. 


UNITED    STATES    OP    NORTH    AMERICA.         169 

As  early  as  1789,  at  the  instance  of  James  Madison,  naviga 
tion  had  obtained  ample  protection,  and  its  advance  contrasted 
strongly  with  the  feeble  progress  of  domestic  manufactures. 
From  two  hundred  thousand  tons,  in  1789,  it  had  arisen,  in  1801, 
to  more  than  half  a  million. 

Under  the  tariff  of  1804,  the  manufacturing  industry  of 
North  America  could  scarcely  be  maintained  in  opposition  to 
that  of  England,  which,  aided  by  constant  protection  and  im 
provement,  had  reached  colossal  proportions.  American  indus 
try  must  have  perished  in  that  struggle,  if  the  embargo,  and 
afterwards  the  war  of  1812,  had  not  come  to  its  relief.  In  this 
period,  as  in  that  of  the  war  of  independence,  industry  received  - 
such  an  extraordinary  impulse,  as  not  only  to  satisfy  the  home 
demand,  but  to  furnish  something  to  foreign  countries.  Accord 
ing  to  a  report  of  the  committee  of  commerce  and  manufactures 
to  Congress,  the  manufactures  of  cotton  and  wool  alone  amounted 
yearly  to  more  than  sixty  millions  of  dollars,  and  employed,  in 
1815,  more  than  one  hundred  thousand  workmen.  It  was  again 
remarked,  as  had  been  the  case  during  the  revolutionary  war, 
that,  as  a  necessary  consequence  of  the  extension  of  manufac 
turing  industry,  there  was  a  rapid  increase  in  all  values,  as  well 
raw  materials  as  manufactured  goods,  labor,  and  real  estate ; 
thus  affording  a  common  prosperity  to  land-owners,  to  workmen, 
and  to  internal  commerce. 

After  the  peace  of  Ghent,  Congress,  taught  by  the  experience 
of  1786,  doubled  during  the  first  year  the  existing  duties,  and 
the  country  for  that  year  continued  to  prosper.  But,  under  the 
pressure  of  commercial  influence  opposed  to  home  manufactures, 
and  of  theoretical  arguments,  Congress,  in  1816,  considerably 
reduced  the  duties,  and  with  the  same  results  from  foreign  com 
petitors  which  had  already  been  experienced  between  1786  and 
1789 ;  that  is,  the  ruin  of  industry,  the  depreciation  of  raw 
materials,  as  well  as  of  real  estate,  and  general  distress  among 
agriculturists.  After  the  country  had  for  the  second  time 
enjoyed  during  the  war  the  benefits  of  peace,  it  suffered  for  the 
second  time  more  from  peace  than  from  the  most  disastrous 
war.  It  was  not  until  1824,  when  the  results  of  the  extravagant 


170  HISTORY. 

legislation  of  England,  upon  the  subject  of  her  corn-laws,  had 
been  felt  in  all  their  extent,  that  the  agricultural  interests  of 
the  Middle  States,  and  also  those  of  the  Northern  and  Western 
States,  were  impelled  to  unite  with  the  manufacturing  interests, 
that  some  higher  duties  were  imposed  by  Congress.  Mr.  Hus- 
kisson  took  precautions  immediately  to  obviate  this  measure,  so 
far  as  it  affected  English  competition,  and  this  tariff  also  was 
soon  discovered  to  be  inadequate.  After  animated  debates,  it 
was  replaced  by  that  of  1828,  with  its  higher  duties. 

The  official  statistics  of  Massachusetts,  published  in  1837, 
give  some  idea  of  the  impulse  communicated  to  American  in 
dustry,  especially  in  the  Northern  and  Middle  States,  by  these 
protective  duties,  notwithstanding  the  gradual  decline  of  the 
system  of  protection  which  came  after  the  tariff  of  1828.  In 
1837,  Massachusetts  contained  two  hundred  and  eighty-two 
manufactories  of  cotton ;  running  five  hundred  and  sixty-five 
thousand  and  thirty-one  spindles ;  employing  four  thousand 
nine  hundred  and  ninety-seven  male,  and  fourteen  thousand 
seven  hundred  and  fifty-seven  female  hands  ;  consuming  thirty- 
seven  millions,  two  hundred  and  seventy-five  thousand,  nine 
hundred  and  seventeen  pounds  of  cotton,  and  making  one 
hundred  and  twenty-six  millions  yards  of  cotton  fabrics,  pro 
ducing  a  value  of  thirteen  millions,  fifty-six  thousand,  six  hundred 
and  fifty-nine  dollars ;  the  whole  capital  employed,  being  four 
teen  millions,  three  hundred  and  sixty-nine  thousand,  seven 
hundred  and  nineteen  dollars. 

The  woollen  manufactures  of  Massachusetts  were  thus  ex 
hibited  in  the  same  statement:  one  hundred  and  ninety-two 
factories;  five  hundred  and  one  machines,  employing  three 
thousand  six  hundred  and  twelve  women,  and  three  thousand 
four  hundred  and  eighty-five  men,  consuming  ten  millions,  eight 
hundred  and  fifty-eight  thousand,  nine  hundred  and  eighty-eight 
pounds  of  wool,  and  producing  eleven  millions,  three  hundred 
and  thirteen  thousand,  four  hundred  and  twenty-six  yards  of 
cloth,  valued  at  ten  millions,  three  hundred  and  ninety-nine 
thousand,  eight  hundred  and  seven  dollars ;  the  whole  capital 


UNITED    STATES    OF    NORTH    AMERICA.         171 

employed  being  five  millions,  seven  hundred  and  seventy  thou 
sand,  seven  hundred  and  fifty  dollars. 

The  same  document  informs  us  that  sixteen  millions,  six 
hundred  and  eighty-nine  thousand,  eight  hundred  and  seventy- 
seven  pairs  of  shoes  and  boots,  were  manufactured  in  that  State, 
destined  chiefly  for  the  western  States,  the  value  being  sixteen 
millions,  six  hundred  and  forty-two  thousand,  five  hundred  and 
twenty  dollars. 

The  other  manufactures  exhibit  a  development  in  similar  pro 
portion.  The  whole  of  the  manufactured  productions  of  the  State, 
independently  of  ship-building,  was  estimated  at  over  eighty-six 
millions,  and  the  capital  employed,  at  sixty  millions  of  dollars. 

The  number  of  workmen  was  one  hundred  and  seventeen  thou 
sand  three  hundred  and  fifty- two,  the  total  population  being  then 
seven  hundred  and  one  thousand  three  hundred  and  thirty-one. 

In  this  manufacturing  population,  there  was  neither  misery 
nor  coarseness  nor  vice  in  a  degree  to  demand  notice ;  on  the 
contrary,  among  the  numerous  laborers  of  both  sexes  prevailed 
the  most  severe  morality,  cleanliness,  and  even  elegance  in 
dress ;  in  libraries  founded  for  their  own  use,  were  seen  books  of 
the  most  instructive  character ;  their  labor  neither  exhausted 
their  strength  nor  their  cheerfulness ;  their  food  was  abundant 
and  wholesome  ;  the  most  part  of  the  young  girls  are  able  to  lay 
up  a  marriage  portion.* 

These  are  the  visible  results  of  low  prices  of  food,  the  mode 
ration  and  the  just  apportionment  of  taxes.  Let  England 
suppress  her  restriction  upon  the  importation  of  agricultural 
products ;  let  her  diminish  her  taxes  upon  consumption  one-half 
or  two-thirds  ;  let  her  cover  the  deficiency  by  a  tax  upon  income, 
and  she  may  secure  a  similar  condition  for  those  who  toil  in  her 
manufactories.! 

*  The  American  Journals  of  1839,  reported  that  more  than  a  hundred 
workmen  in  Lowell  had  each  over  one  hundred  dollars  in  the  Savings 
Bank.  Chevalier  has  a  charming  passage,  in  his  letters,  upon  the  condition 
of  the  laborers  of  Lowell.—  [H.  R.] 

f  List  seems  to  have  had  a  presentiment  of  the  commercial  reforms 
England  was  on  the  eve  of  adopting.  —  [II.  R.] 


172  HISTORY. 

No  country  has  been  so  misunderstood  and  so  wrongly  judged, 
in  regard  to  her  future  destiny  and  her  economical  policy,  as 
North  America,  both  by  theorists  and  by  practical  men.  Adam 
Smith  and  J.  B.  Say  had  declared  that  the  United  States  were 
to  be  devoted  to  agriculture  like  Poland.  The  comparison  was, 
by  no  means,  flattering  to  a  confederation  of  young  and  ambi 
tious  republics ;  and  the  prospect  thus  opened  to  them  was  by 
no  means  flattering.  These  theorists  decided  that  the  des 
tiny  of  North  America  was  to  agriculture  exclusively,  inasmuch 
as  fertile  lands  could  be  got  there  for  almost  nothing.  Americans 
were  warmly  congratulated  for  having  so  heartily  obeyed  the 
prescription  of  nature,  and  for  offering  to  theory  such  a  beau 
tiful  example  of  the  marvellous  benefits  of  free  trade  ;  but  the 
school  of  theorists  soon  experienced  the  disappointment  of  losing 
that  important  proof  of  the  correctness  and  the  practicability 
of  their  theory,  and  of  seeing  the  United  States  seek  their  for 
tune  by  a  very  different  route  from  absolute  free  trade. 

This  young  nation,  which  that  school  had  hitherto  cherished 
as  the  apple  of  its  eye,  became  at  once  the  object  of  most 
energetic  censure  on  the  part  of  the  theorists  of  all  Europe. 
The  New  World,  they  declared,  had  made  little  progress  in 
political  science,  at  a  moment  when  the  European  nations  were 
laboring  with  the  most  sincere  zeal  for  the  realization  of  general 
free  trade ;  at  a  moment  when  England  and  France  particularly 
were  preparing  to  make  rapid  strides  towards  that  great  philan 
thropic  end,  the  United  States  were  retrograding  in  an  attempt 
to  develop  their  prosperity  by  that  obsolete  mercantile  system 
which  science  had  so  clearly  refuted.  A  country  such  as  North 
America,  said  they,  in  which  so  vast  a  space  of  the  most  fertile 
land  was  still  without  culture,  and  where  wages  were  so  high, 
could  not  better  employ  its  capital  and  its  overplus  of  popula 
tion,  than  in  agricultural  industry ;  when  once  the  latter  should 
have  reached  its  complete  development,  manufacturing  industry 
would  start  up  of  itself,  and  without  any  factitious  stimulant ; 
by  giving  artificial  existence  to  manufactures,  the  United  States 
.were  injuring,  not  only  countries  of  more  ancient  culture,  but 
especially  themselves. 


UNITED    STATES    OP    NORTH    AMERICA.         173 

Among  the  Americans,  however,  good  sense,  and  a  con 
sciousness  of  the  wants  of  the  country,  were  stronger  than  their 
faith  in  theory.  Its  doctrines  were  severely  scrutinized,  and 
very  serious  douhts  arose  as  to  the  infallibility  of  precepts  to 
which  its  own  disciples  did  not  conform. 

To  the  argument,  founded  upon  the  great  quantity  of  fertile 
lands  yet  uncultivated,  it  was  replied,  that  in  those  States  of 
the  Union  already  populous,  well  cultivated,  and  prepared  for 
manufactures,  good  lands  were  as  scarce  as  in  Great  Britain ; 
that  the  overplus  of  the  population  of  those  States  was  obliged 
to  emigrate  at  great  expense  to  the  West,  to  obtain  and  culti 
vate  such  lands.  Hence  each  year  the  Eastern  States  incurred 
not  only  considerable  loss  in  material  and  intellectual  capital,  as 
well  as  in  population,  but  still  more  from  the  depreciation  of  their 
lands,  and  their  agricultural  products,  arising  from  this  con 
stant  emigration,  by  which  consumers  were  converted  into  com 
petitors.  The  Union  had  no  interest  in  bringing  into  culture 
those  vast  solitudes  stretching  away  towards  the  Pacific,  before 
the  population,  civilization,  and  military  power  of  the  older 
States  had  attained  a  suitable  development.  On  the  other  hand, 
the  Eastern  States  had  no  advantages  to  draw  from  the  cultiva 
tion  of  those  distant  territories,  but  by  devoting  a  portion  of 
their  industry  to  manufacturing,  so  as  to  exchange  manufactured 
articles  for  commodities  of  the  West.  They  went  farther,  and 
inquired  if  England  was  not  in  a  quite  similar  position ;  if  she 
was  not  selling  in  Canada,  Australia,  and  other  regions,  a  vast 
extent  of  fertile  but  uncultivated  lands ;  if  she  was  not  sending 
to  those  countries  the  overplus  of  her  population  with  about  the 
same  facilities  as  the  United  States  were  sending  theirs,  from 
the  shores  of  the  Atlantic  to  those  of  the  Missouri ;  and  if  so,  why 
England  continued  not  only  to  protect  her  manufacturing  in 
dustry,  but  labored  assiduously  for  its  further  development. 

The  argument  of  this  school,  that  where  wages  were  high  for 
agricultural  labor,  manufactures  could  not  of  course  succeed, 
and  could  only  be  artificially  forced  like  hot-house  plants,  was 
only  well  founded  so  far  as  regarded  articles  of  small  volume 
and  weight  relatively  to  their  value,  and  chiefly  the  product  by 


174  HISTORY. 

manual  labor,  but  not  as  regards  those,  the  price  of  which  is 
but  little  influenced  by  the  rate  of  wages,  and  as  to  which  the 
;  increase  of  price  is  compensated  by  the  use  of  machinery,  by 
the  cheapness  of  raw  materials  and  food,  by  abundance  and 
cheapness  of  fuel  and  timber,  and  finally  by  moderate  taxes  and 
energetic  labor. 

Long  experience  had  taught  the  Americans  that  their  agricul 
ture  could  not  arrive  at  a  high  degree  of  prosperity,  but  upon 
the  condition  that  the  exchange  of  agricultural  products  for 
those  of  manufacturing  industry,  is  a  settled  home  policy ;  that 
if  the  agriculturist  lives  in  North  America,  and  the  manufac 
turer  in  England,  the  exchange  between  them  will  be  frequently 
interrupted  by  war,  by  commercial  revulsions,  or  by  restrictive 
measures  from  without;  that  consequently,  and  upon  the  autho 
rity  of  Jeiferson,  the  prosperity  of  the  country  can  only  be  fixed 
upon  a  solid  basis>  where  the  manufacturers  are  placed  side  by 
side  with  the  agriculturists. 

The  North  Americans  discovered  at  last  that  a  great  nation 
ought  not  to  seek  exclusively  its  immediate  material  benefits ; 
that  civilization  and  power,  possessions  more  precious  and  more 
desirable  than  material  wealth,  as  Adam  Smith  admits,  cannot 
be  acquired  but  by  the  aid  of  manufacturing  skill  and  industry ; 
that  a  nation,  ambitious  of  taking  rank  among  the  more 
cultivated  and  powerful  countries,  must  recoil  before  no  sacri 
fices  to  attain  such  advantages,  and  that  the  Atlantic  States 
are  already  in  possession  of  them. 

The  shores  of  the  Atlantic  first  received  the  population  and 
civilization  of  Europe ;  there,  populous,  cultivated,  and  rich 
States,  were  first  formed ;  there  was  the  cradle  of  their  maritime 
fisheries,  their  coasting  trade,  and  their  naval  power ;  there  in 
dependence  was  achieved,  and  the  confederation  founded ;  it  is 
with  those  States  of  the  coast  that  foreign  trade  is  carried  on ; 
through  them  the  country  is  in  contact  with  the  civilized  world, 
and  receives  the  European  surplus  of  population,  material  capi 
tal,  and  moral  resources ;  it  is  upon  the  civilization,  power,  and 
wealth  of  these  States,  therefore,  that  the  future  welfare  in 
these  respects  of  the  whole  nation  must  depend,  as  also  its 


UNITED    STATES    OF    NORTH    AMERICA.         175 

independence  and  future  influence  upon  less  advanced  coun 
tries. 

Suppose  the  population  of  the  Atlantic  States  should  diminish 
instead  of  increasing,  that  their  fisheries,  their  coasting  trade, 
their  shipping,  their  foreign  commerce,  that. finally,  their  pros 
perity  should  decrease,  or  remain  stationary,  instead  of  advanc 
ing,  we  should  see  the  civilizing  influences  of  the  whole  country, 
the  guarantees  of  its  independence  and  moral  power  diminishing 
in  the  same  proportion.  We  may  even  conceive  the  territory 
of  the  United  States  to  be  entirely  occupied  from  one  ocean  to 
the  other  by  agricultural  states,  and  covered  with  a  numerous 
population,  the  nation  still  remaining  in  an  inferior  position  as 
to  civilization,  independence,  power  and  foreign  commerce. 
Many  nations  are  in  this  condition,  and  with  a  large  population 
are  without  shipping  or  naval  power. 

If  a  design  were  formed  to  arrest  the  progress  of  the  Ameri 
can  people,  by  placing  upon  their  necks  a  foreign,  industrial, 
commercial  and  political  yoke,  this  could  in  no  way  be  so  fully 
attained  as  by  depopulating  the  Atlantic  States,  and  by  pushing 
to  the  interior  their  surplus  population,  capital,  and  strength. 
This  would  retard  the  development  of  the  maritime  power  of  the 
country ;  it  might  lead  in  time  not  only  to  the  industrial  subjec 
tion  of  the  country,  but  to  the  occupation  by  foreign  powers  of 
the  principal  points  of  defence  along  the  coast  of  the  Atlantic, 
including  the  mouths  of  rivers.  The  mode  of  accomplishing  the 
industrial  subjection  would  be  simply  the  prohibiting  or  restrain 
ing  manufacturing  industry  in  the  Atlantic  States,  and  thus 
establishing  in  America  the  policy  of  absolute  free  trade  with 
foreign  countries. 

If  the  Atlantic  States  were  not  manufacturing  states,  they 
could  not  maintain  their  present  rank  in  civilization,  and  could 
not  but  decline  in  every  respect.  How  could  the  cities  of  the 
Atlantic  coast  prosper  without  manufactures  ?  Not  by  sending 
the  goods  of  the  interior  of  the  country  to  Europe,  and  English 
goods  into  the  interior ;  for  a  few  thousand  individuals  might 
suffice  for  such  an  operation.  What  would  become  of  the 
fisheries  ?  The  larger  portion  of  the  population  of  the  interior 


176  HISTORY. 

prefers  fresh  meat  and  fresh  fish  to  salt  fish ;  it  requires  little 
spermaceti  oil,  or  at  least  it  consumes  but  little.  What  would 
become  of  the  coasting  trade  ?  The  states  along  the  coast  being 
peopled  with  agriculturists,  who  produce  their  own  food,  and 
have  their  own  timber  and  their  own  fuel,  there  would  be  small 
employment  for  coasting  vessels.  How  could  foreign  trade  and 
the  shipping  it  employs  be  increased  ?  The  country  would  have 
nothing  to  export  but  what  the  least  civilized  nations  possess  in 
abundance,  and  these  heavy  products  are  not  only  expensive  to 
transport,  but  incur,  in  the  markets  of  manufacturing  nations, 
to  which  they  must  be  sent  for  sale,  duties  which  such  nations 
impose  for  protection  of  their  own  trade  and  shipping. 
The  decline  of  fisheries,  of  the  coasting  trade,  of  navigation 
abroad,  and  foreign  commerce,  must  carry  down  with  it  the 
naval  power.  Without  a  navy,  how  could  the  Atlantic  States 
defend  themselves  against  attacks  from  abroad?  How  could 
even  agriculture  nourish  in  those  States,  so  long  as  the  products 
of  less  costly  and  much  more  fertile  lands  in  the  West,  of  lands 
requiring  no  manure,  could  be  transported  to  the  East  by  canals 
and  railroads,  and  sold  at  lower  rates  than  those  for  which  they 
were  produced  in  the  exhausted  soils  of  the  East?  In  such 
a  state  of  things  the  civilization  of  the  United  States  could 
advance  but  slowly ;  whilst,  under  the  influence  of  free  trade  with 
England,  the  surplus  of  population  and  agricultural  capital 
would  be  driven  to  the  West.  The  actual  position  of  Virginia 
gives  but  a  feeble  idea  of  the  condition  to  which  the  Atlantic 
States  would  be  reduced  by  the  decline  of  manufactures ;  yet 
Virginia,  as  well  as  other  Southern  States  on  the  Atlantic, 
enjoys  considerable  advantage  in  supplying  the  manufacturing 
States  with  agricultural  products. 

The  existence  of  manufacturing  industry  in  the  Atlantic  States 
changes  entirely  the  face  of  things,  and  produces  the  following 
results :  population,  capital,  artistic  skill,  intellectual  resources, 
flow  in  abundance  from  the  various  European  countries ;  as  the 
raw  material  comes  from  the  West,  the  demand  for  the  manufac 
tured  products  of  those  States  increases ;  the  population,  the 
number  and  importance  of  their  cities,  with  their  wealth,  augments 


UNITED    STATES    OF    NORTH    AMERICA.          177 

in  proportion  to  the  progress  of  culture  in  the  Western  solitudes ; 
the  increasing  population  promotes  their  own  agriculture  by  an 
enlarged  demand  for  meat,  butter,  cheese,  milk,  vegetables, 
oleaginous  plants,  fruits,  and  by  a  greater  demand  for  salt  fish 
and  the  products  of  the  whale  and  other  maritime  fisheries  ;  the 
coasting  trade  has  the  benefit  of  transporting  large  quantities  of 
food,  timber,  coal,  etc.,  for  a  manufacturing  population ;  their 
manufacturers  produce  a  multitude  of  articles  for  export  to  all 
parts  of  the  world  with  great  commercial  advantage ;  hence  mari 
time  fisheries,  the  general  shipping  interests,  and  naval  power 
increase,  and  with  them  the  securities  of  national  independence 
and  its  influence  upon  other  countries,  especially  those  of 
South  America;  from  all  which  art  and  science,  civilization  and 
literature  would  receive  in  the  Atlantic  States  a  new  impulse, 
communicating  their  benign  influences  largely  to  the  States  of 
the  West. 

Such  are  the  reasons  why  the  United  States  have  been  led  to 
limit  the  importation  of  foreign  manufactured  products,  and  to 
protect  their  own  manufactures.  We  have  already  shown  the 
success  of  this  policy.  The  experience  of  the  United  States 
and  the  history  of  industry  in  other  nations,  show  that  but  for 
this  policy  the  Atlantic  States  could  never  have  become  manu 
facturing  communities. 

The  commercial  revulsions,  so  frequent  in  America,  have  been 
wrongly  held  up  as  a  consequence  of  these  restrictions.  The 
previous  experience  of  North  America,  as  well  as  that  more 
recent,  shows  that  these  revulsions  have  never  been  more  fre 
quent  nor  more  disastrous  than  at  the  times  when  the  trade  with 
England  was  the  least  restricted.  The  commercial  revulsions  in 
the  agricultural  States,  which  receive  their  supplies  of  manu 
factured  articles  from  abroad,  are  caused  by  the  want  of  equi 
librium  between  imports  and  exports.  The  manufacturing 
States,  richer  in  capital  than  the  agricultural,  and  always  bent 
upon  enlarging  their  markets,  dispose  of  their  goods  on  credit, 
and  press  them  upon  consumers.  This  is  like  an  advance  in 
money  upon  the  next  crop.  Now  if  the  crop  proves  insufficient 
and  its  value  comes  short  of  previous  consumption,  or  if  it  be 
12 


178  HISTORY. 

abundant,  and  prices  rule  very  low,  if  at  the  same  time  the 
market  remains  encumbered  with  articles  of  foreign  manufac 
tures,  this  disproportion  between  the  means  of  paying  and  the 
previous  consumption,  as  well  as  between  the  supply  and  demand 
of  agricultural  and  manufactured  products,  must  produce  a  com 
mercial  crisis.  Such  a  crisis  may  be  increased  and  aggravated, 
but  is  not  produced  by  the  operation  of  foreign  or  American 
Banks.  We  shall  give  in  the  next  chapter  explanations  upon 
this  subject. 


CHAPTER  X. 

LESSONS  FROM  HISTORY. 

AT  all  times,  and  in  all  places,  the  intelligence,  morality,  and 
activity  of  the  citizens  have  been  regulated  by  the  prosperity 
of  the  country ;  and  wealth  has  increased  or  diminished  accord 
ing  to  these  conditions ;  but  nowhere  have  labor,  economy,  the 
spirit  of  invention,  and  the  spirit  of  industrial  enterprise,  ac 
complished  any  thing  great,  where  civil  liberty,  the  institutions 
and  laws,  external  policy,  the  internal  government,  and  especi 
ally  where  national  unity  and  power  have  not  lent  their  support. 

History  everywhere  exhibits  an  energetic  mutual  reaction 
of  social  and  individual  powers.  In  the  Italian  and  Hanseatic 
cities,  in  Holland  and  England,  in  France  and  America,  we  see 
the  productive  powers,  and  consequently  the  wealth,  of  indi 
viduals,  increasing  with  the  advance  of  political  and  social  insti 
tutions,  and  the  latter  in  their  turn,  finding  in  the  increase  of 
the  material  wealth  and  productive  power  of  individuals  the 
elements  of  their  further  improvement.  The  impulse  of  the  in 
dustry  and  power  of  England  dates  from  the  establishment  of 
her  liberty.  The  industry  and  power  of  the  Venetians  and 
the  Hanseatics,  of  the  Spaniards  and  the  Portuguese,  were 
extinguished  at  the  same  time  with  their  liberty.  It  is  in  vain 
that  individuals  are  industrious,  saving,  intelligent,  and  inven- 


LESSONS    FROM    HISTORY.  179 

tive ;  these  free  institutions  are  still  needful  for  the  proper 
application  of  these  qualities.  History  teaches,  in  fact,  that 
individuals  draw  the  greatest  part  of  their  productive  power 
from  the  social  condition  and  the  institutions  of  society. 

The  influence  of  liberty,  of  intelligence,  and  knowledge  upon 
power,  and  consequently,  upon  productive  energy,  upon  the  wealth 
of  the  country,  appears  nowhere  so  clearly  as  in  the  shipping 
interests.  Of  all  the  branches  of  industry,  navigation  is  that 
which  requires  the  most  energy  and  courage,  the  most  boldness 
and  perseverance,  all  qualities  which  can  only  flourish  in  the 
atmosphere  of  liberty.  In  no  other  department  of  industry  are 
ignorance,  superstition,  and  prejudice,  indolence,  cowardice, 
and  effeminacy  so  fatal,  in  none  is  the  sentiment  of  personal 
independence  so  indispensable.  History  furnishes  no  instance 
of  an  enslaved  people  who  have  excelled  in  navigation. 

The  nations  of  India,  the  people  of  China  and  of  Japan, 
have  from  the  most  ancient  times  confined  themselves  to  the 
navigation  of  their  canals,  their  rivers,  or  along  their  coasts. 
In  ancient  Egypt,  maritime  navigation  was  discouraged ;  the 
priests  and  kings  fearing,  apparently,  that  it  might  furnish 
aliment  to  the  spirit  of  liberty  and  independence.  The  freest 
and  most  civilized  nations  of  Greece  were  also  the  most  pow 
erful  at  sea ;  with  their  liberty,  their  maritime  power  came  to 
an  end,  and  history,  which  relates  so  many  victories  gained  on 
land  by  the  kings  of  Macedonia,  gives  no  account  of  their  naval 
victories. 

When  were  the  Romans  powerful  at  sea,  and  when  do  we  hear 
no  more  of  their  fleets  ?  At  what  time  did  Italy  rule  like  a 
sovereign  the  whole  Mediterranean,  and  since  what  time  has 
even  their  coasting  trade  fallen  into  the  hands  of  foreigners  ? 
The  Inquisition  pronounced  sentence  of  death  upon  the  Spanish 
fleet  long  before  it  was  executed  by  the  fleets  of  England  and 
Holland.  From  the  day  when  the  mercantile  oligarchies  arose 
in  the  Hanse  Towns,  their  power  and  courage  deserted  the 
League.  In  the  Spanish  Netherlands  the  seamen,  without  other 
aid,  achieved  their  liberties ;  those  who  submitted  to  the  Inqui 
sition  were  doomed  to  witness  the  closing  even  of  their  rivers. 


180  HISTORY. 

The  English  fleet,  by  conquering  that  of  Holland  in  the  British 
channel,  did  no  more  than  take  possession  of  the  maritime 
supremacy  which  the  spirit  of  liberty  had  long  before  assigned 
to  it.  Holland,  however,  retains  to  this  time  a  great  part  of 
her  marine,  whilst  that  of  the  Spaniards  and  Portuguese  is 
nearly  annihilated.  Eminent  statesmen  have  in  vain  attempted 
to  make  France  a  naval  power,  for  fleets  constructed  under  the 
rule  of  despotism  always  disappear.  In  our  time  the  mercantile 
and  military  marine  of  France  are  upon  the  increase.  The 
independence  of  North  America  had  scarcely  been  achieved,  when 
we  see  them  struggling  successfully  against  the  gigantic  fleets 
of  the  mother  country.  But  what  is  the  navigation  of  Central 
and  South  America  ?  So  long  as  their  flags  shall  not  float  upon 
every  sea,  the  solidity  of  their  republican  governments  must 
remain  questionable.  Look  at  Texas ;  no  sooner  is  she  awake 
to  separate  existence,  than  she  claims  her  part  in  the  Empire  of 
Neptune. 

Navigation  is  but  an  element  in  the  industrial  power  of  a 
country,  an  element  which  can  grow  and  flourish  only  under  the 
support  of  all  the  people,  and  by  the  power  of  the  whole  nation. 
Navigation,  internal  and  external  commerce,  agriculture  itself 
can  at  no  time  or  place  become  prosperous  but  where  manufac 
tures  are  permitted  to  become  prosperous.  But  if  liberty  is  the 
fundamental  condition  of  the  development  of  navigation,  how 
much  more  is  it  the  essential  condition  of  the  increase  of  manu 
facturing  industry  and  of  all  the  productive  powers  of  a  country  ? 
History  records  no  instance  of  a  rich  nation  addicted  to  com 
merce  and  the  arts,  which  has  not,  at  the  same  time,  been  a  free 
nation. 

Where  manufactures  flourish,  we  find  also  the  means  of  com 
munication,  the  improvement  of  river  navigation,  the  construc 
tion  of  canals  and  roads,  steam  navigation,  and  railways ;  all 
which  are  an  essential  condition  of  advanced  agriculture  and 
civilization. 

History  informs  us  that  arts  and  trades  have  travelled  from 
city  to  city  and  from  country  to  country.  Persecuted  and 
oppressed  in  one  country,  they  have  fled  to  cities  and  countries 


LESSONS    FROM    HISTORY.  181 

where  they  were  assured  of  liberty,  protection,  and  assistance. 
They  passed  thus  from  Greece  and  Asia  to  Italy,  thence  to 
Germany,  Flanders,  and  Brabant,  and  from  the  two  last  to 
Holland  and  England.  In  these  cases  it  was  folly  and  despot 
ism  which  drove  them  away,  and  the  blessings  of  liberty  which 
attracted  them.  But  for  the  extravagances  of  the  continental 
governments,  England  could  never  have  reached  her  industrial 
supremacy.  Is  it  not  more  rational,  however,  not  to  wait  until 
other  nations  are  insane  enough  to  drive  out  their  artizans  and 
compel  them  to  seek  refuge  among  us,  but  without  trusting  to 
such  contingencies  to  attract  them,  by  offering  to  all  the  highest 
advantages  our  position  affords?  Experience  teaches  us,  it  is 
true,  that  the  wind  carries  with  it  the  seeds  of  one  country  to 
another,  and  that  desert  places  have  thus  been  changed  into 
heavy  forests.  But  would  it  be  wise  for  the  proprietor  of  waste 
land  to  wait  for  the  wind  to  perform  this  office  of  planting  and 
transformation  during  the  lapse  of  centuries  ?  Is  it  folly  in 
him  to  force  nature  by  planting  his  uncultivated  lands,  that  he 
may  attain  his  object  in  a  score  of  years  ?  History  shows  that 
whole  nations  have  successfully  accomplished  what  the  wise  land 
owner  always  achieves. 

A  few  free  cities  or  small  republics,  limited  in  their  territory, 
their  population,  and  military  power  ;  a  few  associations  of  such 
cities  and  such  states,  sustained  by  the  energy  of  a  new-born 
liberty,  favored  by  their  geographical  position,  and  by  a  fortu 
nate  concurrence  of  circumstances,  became  distinguished  by  their 
industry  and  commerce  long  before  any  of  the  great  monarchies 
attained  such  distinction,  through  their  free  communication  with 
the  former,  to  which  they  furnished  agricultural  products  in 
exchange  for  manufactures.  Such  cities  and  countries  arose  to  a 
high  degree  of  wealth  and  power,  as,  for  instance,  Venice  and  the 
Hanseatic  cities,  Flanders  and  Holland. 

Free  trade  was,  at  the  beginning,  not  less  beneficial  to  the 
large  States  than  to  those  mentioned.  Considering  the  abun 
dance  of  their  natural  resources,  and  the  rudeness  of  their  social 
condition,  the  free  admission  of  foreign  manufactured  products, 
and  the  free  exports  of  their  agricultural  products  were  tho 


182  HISTORY. 

most  certain  and  effectual  means,  developing  their  productive 
powers  of  inuring  to  labor,  people  who  were  idle  and  contentious  ; 
of  interesting  the  nobles  and  the  proprietors  of  the  soil  in  in 
dustry  ;  and  of  awaking  a  spirit  of  enterprise  in  sluggish  mer 
chants  ;  in  short,  of  increasing  their  culture,  their  industry,  and 
their  power. 

England,  especially,  has  derived  these  benefits  from  her  rela 
tions  with  the  Italians  and  the  Hanse  Towns,  with  the  Flemings 
and  the  Dutch.  Having  arrived,  by  the  aid  of  free  trade,  to  a 
certain  development,  the  great  States  soon  began  to  comprehend 
that  the  highest  point  of  culture,  power,  and  wealth,  could  be 
reached  only  by  uniting  in  the  same  country  manufactures  and 
commerce  with  agriculture :  it  became  obvious  to  them  that  the 
infant  manufactures  of  a  country  commencing  that  career,  could 
not  live  and  prosper  in  free  competition  with  manufactures  long 
established  in  other  countries ;  that  fisheries  and  mercantile 
navigation,  which  are  the  basis  of  maritime  power,  could  prosper 
only  by  special  assistance;  and  that  merchants  and  manufac 
turers  exposed  to  competition  with  foreigners,  superior  in  capital, 
experience  and  knowledge,  must  finally  succumb  and  continue 
to  be  paralyzed.  They  endeavored,  consequently,  by  restric 
tions,  by  favors  and  encouragements,  to  transplant  to  their  own 
soil  the  capital,  skill,  and  enterprise  of  foreigners ;  which  they 
did  with  more  or  less  success  and  rapidity,  according  as  the 
means  employed  had  been  used  with  more  or  less  discretion, 
and  applied  with  more  or  less  energy  and  perseverance. 

England,  especially,  had  recourse  to  this  policy;  but,  kings 
wanting  intelligence,  or  abandoned  to  their  passions,  civil  dis 
turbances,  or  foreign  wars,  having  frequently  interrupted  Jts 
application,  it  was  only  after  the  reign  of  Edward  VI.  and  Eli 
zabeth,  and  after  subsequent  revolutions,  that  England  had  a 
system  fixed  and  appropriate  to  its  'object.  Eor  what  efiect 
could  the  measures  of  Edward  III.  have,  when  we  remember 
that  down  to  the  time  of  Henry  VI.,  it  was  not  permitted  to 
transport  grain  from  one  county  of  England  to  another,  nor  to 
export  it  abroad  ?  When  we  recollect  that  under  Henry  VII. 
and  Henry  VIIL,  every  kind  of  interest,  even  the  profits  of 


LESSONS    FROM    HISTORY.  183 

exchange,  were  regarded  as  usury ;  and  when  the  government 
endeavored  to  encourage  industry  by  low  taxes  upon  woollen 
cloths  and  upon  wages,  and  to  promote  the  production  of  wheat 
by  discouraging  the  increase  of  sheep.  How  much  sooner  would 
the  woollen  manufacture  and  the  navigation  of  England  have 
reached  a  high  degree  of  prosperity,  if  Henry  VIII.  had  not 
considered  the  high  price  of  wheat  an  evil :  if,  instead  of  ex 
pelling  in  a  mass  foreign  artisans,  he  had,  after  the  example  <of 
his  predecessors,  exerted  himself  to  draw  thither  a  larger  num 
ber  :  if  Henry  VII.  had  not  rejected  the  Act  of  Navigation, 
proposed  to  him  by  his  parliament. 

In  France,  we  have  seen  manufactures,  free  trade  at  home, 
commerce  abroad,  fisheries,  mercantile  navigation,  and  naval 
power, — in  a  word,  all  the  attributes  of  a  great,  powerful,  and 
rich  nation, — obtained  by  England  only  after  centuries  of  effort, 
—  rise  in  a  few  years  as  by  enchantment,  at  the  bidding  of  one 
great  man,  and  disappear  as  suddenly  under  the  iron  hand  of 
religious  fanaticism  and  despotic  rule. 

We  have  seen  the  principle  of  free  trade  struggling  without 
success  in  unfavorable  circumstances  against  restrictions  en 
forced  by  power ;  the  Hanseatic  League  annihilated,  and  Holland 
succumb  to  the  attacks  of  England  and  France. 

The  decline  of  Venice,  Spain,  and  Portugal,  the  retrograde 
movement  of  France  after  the  revocation  of  the  Edict  of  Nantes, 
and  the  history  of  England,  where  liberty  went  hand  in  hand 
with  industry,  commerce,  and  national  wealth,  show  that  restric 
tive  policy  is  efficient  only  so  far  as  it  is  accompanied  by  the 
development  and  progress  of  civilization  and  free  institutions. 

On  the  other  hand,  the  history  of  the  United  States,  and  the 
experience  of  England,  demonstrate  that  a  very  advanced  culture 
with  or  without  free  institutions,  if  not  supported  by  a  wise 
commercial  policy,  is  but  a  feeble  guarantee  of  the  economical 
progress  of  a  nation. 

Modern  Germany,  deprived  of  an  energetic  and  united  com 
mercial  policy,  abandoned  in  her  territory  to  the  competition 
of  a  foreign  manufacturing  industry  superior  in  every  respect ; 
excluded  at  the  same  time  from  foreign  markets  by  arbitrary 


184  HISTORY. 

and  often  capricious  restrictions,  far  from  accomplishing  an  in 
dustrial  progress  in  harmony  with  her  degree  of  culture,  could 
not  even  maintain  her  old  rank,  and  became  like  a  colony,  a 
prey  to  the  very  nation  of  which,  a  few  centuries  before,  she 
had  taken  the  same  advantage  through  her  merchants,  until,  at 
last,  her  governments  determined,  by  a  strong  and  common 
system,  to  secure  their  home  markets  to  their  own  industry. 

/The  United  States,  in  a  better  posture  than  any  country  be 
fore  them,  to  take  advantage  of  free  trade:  influenced,  more 
over,  in  the  very  infancy  of  their  independence,  by  the  lessons 
of  the  cosmopolite  school,  made  a  greater  exertion  than  had 
ever  been  made  before,  to  apply  that  principle.  But  twice  were 
their  people  obliged  by  wars  with  Great  Britain  to  manufacture 
for  themselves  commodities  which,  under  the  system  of  free 
trade,  they  had  imported  from  abroad ;  twice,  upon  the  return  of 
peace,  were  they  carried  by  free  competition  with  foreign  countries 
to  the  very  verge  of  ruin ;  and,  admonished  by  this  lesson,  that 
in  the  present  state  of  the  world,  a  great  nation  must,  above 
all,  seek  by  a  suitable  and  harmonious  development  of  its  own 
productive  powers,  to  make  sure  the  guarantees  of  its  prosperity 
and  independence. 

History  teaches  that  restrictions  are  much  less  the  creation 
of  speculative  minds  than  the  national  consequences  of  diversity 
of  interests  —  the  struggles  of  nations  for  independence  or 
supremacy,  and,  consequently  of  national  rivalries  and  wars; 
and  that  they  are  to  cease  at  the  same  time  with  the  conflict  of 
national  interests,  or  under  some  new  system  of  international 
law.  The  inquiry,  how  nations  can  be  united  in  a  federation, 
and  how  in  the  disputes  between  independent  people  judicial 
decrees  are  to  be  substituted  for  the  power  of  arms,  is  equivalent 
to  this:  How  can  universal  free  trade  be  substituted  for 
national  systems  of  commerce  ?  * 

*  We  think  there  is  some  error  involved  in  this.  It  seems,  indeed,  to  be 
the  opinion  of  List  that  in  certain  conditions  of  the  world  free  trade  may 
be  assumed  as  a  sound  doctrine  in  the  sense  in  which  it  is  supported  by 
the  school  which  maintains  it  as  a  fundamental  principle.  We  deny  that 
it  ever  can  be  sound  doctrine  in  their  sense.  In  our  view,  free  trade  is  a 


LESSONS    PROM    HISTORY.  185 

The  experience  of  certain  nations  adopting  the  principle  of 
free  trade  in  the  face  of  nations  superior  in  industry,  riches,  and 

policy,  a  means,  not  a  doctrine  or  a  philosophical  truth,  or  a  principle. 
Free  trade  is  now  the  true  policy  of  Great  Britain.  We  do  not  believe  that 
under  any  probable  circumstances  it  could  be  the  policy  of  all  civilized 
nations ;  for  if  all  now  possessed  equal  advantages  with  Great  Britain,  a 
severe  and  destructive  competition  would  take  place,  making  it  necessary 
to  resort  again  to  the  protection  of  the  laborers  of  each  nation.  The  object 
of  industry,  that  labor  by  which  men  live,  is  not  the  greatest  development 
of  foreign  trade  :  it  is  the  comfort,  well-being,  and  moral  progress  of  the 
masses  of  each  separate  nationality.  We  say  each  nation,  because  each 
separate  people  must  take  care  of  themselves;  their  power  reaches  no 
further,  and  their  comprehension  of  their  own  interests  must  be  more  full 
than  that  of  others.  Under  no  circumstances,  that  we  can  conceive  then, 
can  it  be  the  duty  of  any  government  to  give  up  the  care  of  the  labor,  that 
is,  of  the  laborers  of  the  country.  Now  if  free  trade  were  the  great  object 
of  human  life,  it  should,  of  course,  be  the  effort  of  governments  to  attain  to  it  as 
quickly  as  possible.  Or,  if  free  trade  could  secure  more  effectually  than 
any  other  policy  the  welfare  of  the  masses,  then  it  should  be  pursued  for 
that  reason.  But  when  we  remember  that  the  welfare  of  the  masses  has 
no  place  in  the  theory  of  the  free-trade  school,  we  may  well  apprehend 
that  the  development  of  their  system  will  not  be  directed  to  that  object 
nor  be  found  to  subserve  it.  The  truth  is,  the  care  of  men  in  social  life  is 
a  task  so  complicated,  so  changing,  requiring  such  faithful  guardianship 
and  finally  such  kindly  and  charitable  regard,  that  it  can  never  be  left  to 
a  system  of  political  economy  which  does  not  even  profess  to  have  it  in 
view.  There  is  no  doubt  that  the  advocates  of  free  trade  imagine  that 
under  its  sway  all  the  industrial  interests  of  nations  and  their  people  would 
find  their  right  position,  and  every  laborer  his  true  place  as  one  of  the  cogs 
in  the  vast  machinery  which  manufactures  wealth.  So,  indeed,  in  the  view 
of  the  system  every  man  would  always  be  in  his  place,  that  is,  where  the 
force  of  circumstances  would  place  him,  over  which,  neither  he  nor  his 
country  could  exercise  any  control.  The  system  has  no  provision  for  any 
inquiry  whether  any  one  man  or  any  class  of  men,  is  happy  or  miserable, 
well  or  ill-fed,  or  clothed,  or  lodged,  or  educated ;  it  gives  men  the  privi 
lege  of  free  trade  whose  lot  in  life  is  nothing  but  labor. 

But  this  system  regards  only  international  trade,  and  makes  every  other 
interest  bend  to  what  will  promote  the  progress  of  foreign  trade.  The 
palpable  error  involved  in  this  may  be  seen  by  recurring  to  the  fact  that  no 
nation  or  people  can  by  any  possibility  derive  more  than  one-tenth  of  their 
consumption  from  other  nations.  The  average  of  the  consumption  thus 
imported  among  civilized  nations  at  the  present  day  does  not  reach  five  per 
cent,  of  their  home  production.  Nine-tenths  and  more  of  what  people  eat, 


186  HISTORY. 

power,  and  protected  by  a  restrictive  commercial  system,  for 
instance,  such  as  that  of  Portugal  in  1703,  of  France  in  1786, 
of  the  United  States  in  1786  and  1816,  of  Prussia  from  1815 
to  1821,  and  of  Germany  for  centuries,  proves  that  the  prosperity 
of  a  country  may  be  thus  sacrificed  without  any  benefit  for 
mankind  in  general,  and  for  the  sole  advantage  of  the  power 
which  sways  the  sceptre  of  commerce  and  industry. 

Switzerland,  as  will  be  shown  hereafter,  forms  an  exception 
that  proves  too  much  and  too  little,  at  the  same  time,  for  and 
against  either  system. 

drink,  wear,  and  consume,  is  of  home  production.  The  welfare  of  people, 
so  far  as  it  depends  on  the  necessaries  and  comforts  of  life,  and  the  welfare 
of  laborers  or  producers,  so  far  as  it  depends  upon  the  rate  of  their  compen 
sation  or  the  extent  to  which  they  are  permitted  to  enjoy  the  products  of  their 
own  labor,  should  be  independent  of  foreign  trade,  and  especially  should 
not  the  producers  and  consumers  of  the  nine-tenths,  or  rather  the  nine- 
teen-twentieths,  be  injured,  or  their  products  be  reduced  in  quantity  by 
any  influence  of  foreign  trade.  Foreign  trade,  over  the  commodities  of 
which,  or  the  laborers  who  produce  them,  no  nation  can  exercise  any  con 
trol,  except  when  crossing  its  boundary,  should  be  so  regulated,  then, 
as  in  no  way  to  diminish  the  efficiency  of  that  industry  upon  which 
people  are  mainly  dependent,  not  only  for  the  articles  of  their  consumption, 
but  for  the  opportunity  of  producing,  as  well  as  of  earning  and  enjoying 
them.  Foreign  trade  being  shorn  of  its  power  to  do  injury,  every  nation 
might  make  it  as  free  as  it  pleased.  Many  of  the  positions  of  free-trade 
theorists  would,  in  fact,  be  then  sound  and  forcible.  The  error  now  com 
mitted  in  that  system  is  that  the  industrial  welfare  of  men  is  left  to  the 
chances,  changes,  and  variable  results  and  influences  of  foreign  trade, 
instead  of  being  made,  as  it,  more  than  anything  else  deserves  to  be,  the 
direct  and  principal  object  of  public  care  and  legislation.  The  friends  of 
free  trade  say,  let  free  trade  prevail,  and  all  will  come  right  with  the  people. 
We  say,  let  all  be  made  right  with  the  people,  even  if  in  making  all 
right,  free  trade  should  be  one  of  the  means.  We  are  unwilling  to 
assume  any  other  starting  point  for  the  development  of  a  social  system  than 
the  best  interests  of  the  people;  we  are  unwilling  to  regard  free  trade  in 
any  other  light  than  as  one  of  the  means  which  may  or  may  not,  in  the 
exercise  of  an  intelligent  discretion,  be  applied  to  that  object. 

It  is  not  difficult  to  divine  why  the  economists  of  the  Say  school  are  such 
etrenuous  advocates  of  absolute  free  trade.  In  the  last  analysis  it  is  the 
Bingle  leg  upon  which  their  system  rests;  take  from  it  this  prop,  and  it 
comes  to  the  ground.  They  wish  to  establish  a  law  of  social  economy  or 


LESSONS    FROM    HISTORY.  1ST 

Colbert  is  not,  in  our  opinion,  the  inventor  of  the  system  to 
•which  the  Italians  have  given  his  name ;  we  have  seen  that  the 
English  had  elaborated  it  long  before  his  time.  Colbert  only 
put  in  practice  what  France  was  -to  adopt  soon  or  late  for  the 
accomplishment  of  her  destiny.  If  any  censure  is  to  be  applied 
to  Colbert,  it  would  be  that  of  having  attempted  to  execute  a 
work  under  an  absolute  government,  which  could  not  have  long 
duration  until  after  a  great  change  in  her  political  institutions. 

To  justify  Colbert,  it  might  be  answered  that  his  system,  if 
pursued  by  wise  monarchs  and  enlightened  ministers,  would,  in 
the  way  of  reform,  have  overcome  the  obstacles  opposed  to  the 
progress  of  manufactures,  agriculture,  and  commerce,  as  well  as 
those  in  the  way  of  public  liberty,  and  thus  spared  France  a 
revolution ;  it  might  be  said  that  if  France,  stimulated  in  her 
development  by  the  mutual  action  and  reaction  of  industry  and 
liberty,  had  persevered  in  this  policy,  she  would  have  been  for 
the  last  half-century  the  fortunate  rival  of  England  in  manu 
factures,  internal  communications  in  general,  commerce  and 
colonization,  as  well  as  in  fisheries,  and  in  her  mercantile  and 
military  marine. 

History  teaches  us,  finally,  how  nations,  endowed  by  nature 
with  all  the  means  of  reaching  the  highest  degree  of  wealth  and 

science,  to  take  the  subject  out  of  the  domain  of  sound  discretion  and  com 
mon  sense.  Their  rules  are  laws  of  science,  which  admit  no  contradiction. 
The  law  in  this  case  is  free  trade,  any  interference  with  it  is  a  violation  of 
science  and  a  disturbance  of  the  natural  order  of  things.  Looking  upon 
all  the  producing  agencies,  man,  machinery,  and  the  powers  of  nature,  as 
being  merely  agents  under  the  stimulus  of  their  law  of  demand,  they  take 
no  account  of  industry  or  its  processes,  or  its  laborers,  they  merely  receive 
its  products  when  brought  upon  the  scene  of  distribution ;  they  take  little 
account  of  consumption  except  in  the  light  of  demand  and  supply,  nor  of 
prices,  except  so  far  as  they  may  hinder  or  facilitate  distribution,  one  of 
two  great  works  over  which  the  so-called  science  of  political  economy  pre 
sides.  To  admit  any  interference  with  this  distribution,  founded  upon 
considerations  of  humanity  or  policy,  or  the  special  interests  or  well-being 
of  the  people  of  any  natien,  is  to  violate  a  law  of  political  economy.  To 
change  the  natural  order  of  distribution,  to  make  it  a  subject  for  sound 
discretion  or  the  exercise  of  common  sense,  is  absolutely  to  shake  the 
whole  foundation  on  which  Say's  system  of  political  economy  is  built.  — 
[S.  C.] 


188  HISTORY. 

power,  can,  without  inconsistency,  and  should,  change  their 
system  in  proportion  as  they  advance.  At  first,  indeed,  by  free 
trade  with  nations  of  higher  culture,  they  emerge  from  bar 
barism,  and  improve  their  agriculture ;  then,  by  means  of  restric 
tions,  they  give  an  impulse  to  manufactures,  fisheries,  naviga 
tion,  and  foreign  commerce ;  then,  finally,  after  having  reached 
the  highest  degree  of  skill,  wealth,  and  power,  by  a  gradual 
return  to  the  principle  of  free  trade  and  free  competition  in 
their  own  and  foreign  markets,  they  keep  their  agriculturists 
from  inaction,  their  manufacturers  and  their  merchants  from 
indolence,  and  stimulate  them  to  wholesome  activity,  that  they 
may  maintain  the  supremacy  which  they  have  acquired.  In  the 
first  of  these  stages  we  see  Spain,  Portugal,  and  Naples,  in 
the  second,  Germany  and  North  America ;  France  appears  to 
be  on  the  limits  of  the  latter ;  but  England  alone  has  not  only 
reached,  but  maintains  an  industrial  and  commercial  supremacy. 


BOOK  II.  —  THEOET. 

CHAPTER  I. 

POLITICAL  ECONOMY  AND  COSMOPOLITE  ECONOMY. 

BEFORE  Quesnay  and  the  French  economists,  there  had  been 
only  a  practical  political  economy,  as  shown  in  national  adminis 
tration.  Statesmen  and  writers  who  treated  administrative 
questions,  applied  themselves  exclusively  to  the  agriculture, 
manufactures,  commerce,  and  navigation  of  the  country  to  which 
they  belonged,  without  analyzing  the  causes  of  wealth,  and 
without  ascending  to  the  study  of  the  interests  of  humanity. 

Quesnay,  who  first  conceived  the  idea  of  universal  free  trade, 
extended  his  view  to  the  whole  of  mankind,  confining  himself 
to  no  single  nation.  The  title  of  his  work  is  :  Physiocratie  ou 
du  gouvernement  le  plus  avantageuse  au  genre  humain.  *  His 
starting  point  is  that  the  merchants  of  all  countries  must  be 
considered  as  constituting  a  single  commercial  republic.^  It  is 
obvious  that  Quesnay  treats  of  the  cosmopolitical  economy;  the 
science  which  teaches  how  men  may  attain  to  a  state  of  well- 
being,  whilst  political  economy  merely  teaches  how  a  nation,  in 
certain  circumstances,  may  attain,  by  means  of  agriculture,  V 

*  Physiocracy,  or  the  Government  most  advantageous  to  mankind.     The 
principal  works  of  Quesnay  were  collected  under  this  title,  not  by  Quesnay   J 
himself,  but  by  Dupont  de  Nemours,  his  disciple.     It  is  true  that  Quesnay 
has   often   employed   the   expression,  —  the   order  most  advantageous  to 
mankind.  —  [H.  E.] 

f  Quesnay  adopts  the  idea  of  an  universal  commercial  republic,  but  at 
the  same  time  recognizes  the  existence  of  separate  nations.  The  following 
passage  is  in  the  Observations  which  follow  his  Tableau  Economique :  "An 
agricultural  and  commercial  kingdom  unites  two  nations  distinct  from  each 

(189) 


190  THEORY. 

manufacturing  industry,  and  commerce,  to  prosperity  or  civili 
zation  and  power.* 

other,  the  one  constitutes  that  portion  of  the  people  which' is  attached  to 
the  land ;  the  other  an  extrinsic  addition,  which  forms  a  portion  of  the 
general  republic  of  foreign  commerce,  which  is  employed  and  sustained 
by  agricultural  nations."  —  [H.  R.] 

*  As  Quesnay  was  the  first  to  conceive  and  announce  the  idea  of  universal 
free  trade,  the  present  school,  who  have  taken  that  feature  of  his  system 
as  the  basis  of  their  own,  have  further  shown  their  obligations  to  the  head 
of  the  Physiocratic  school,  by  keeping  ever  before  them  his  idea  of  a  great 
commercial  republic.  Such  a  republic  would  consist  of  the  men  in  every 
country  engaged  in  foreign  commerce.  The  merchant  princes  of  this  great 
commercial  republic  would  in  practice  soon  become  the  governing  power. 
That  would  have  been  the  result  in  Quesnay's  system  carried  out,  it  will 
not  be  less  so  when  the  system  which  knows  only  free  trade  is  carried  out. 
-[S.C.] 

The  distinction  between  political  economy  and  cosmopolitical  economy, 
upon  which  List  insists,  is  exceptionable.  Science  is  always  cosmopolite 
in  this  sense,  that  it  never  confines  its  researches  and  its  laws  to  any  one 
nation  in  particular ;  that  it  extends  them,  on  the  contrary,  over  all  nations 
and  through  all  periods.  But  in  its  meditations  upon  mankind,  it  ought 
to  regard  men  as  they  have  ever  been,  as  they  now  are,  and  as  they  proba 
bly  will  for  ever  exist,  in  nations  or  societies  of  different  degrees  of  culture 
and  development.  If  it  adheres  not  to  this  great  fact,  if  it  speculates  upon 
an  ideal  humanity,  it  is  a  science  afloat,  or  rather  it  is  no  science.  Such 
would  be  the  case  of  this  cosmopolitical  economy  which  would  reduce  the 
science  to  a  few  empty  and  inapplicable  abstractions.  The  political  economy 
which  is  not  merely  for  the  use  of  some  particular  nation,  as  France  or 
England,  but  which  reposes  upon  the  attentive  study  of  all  societies,  and 
is  fitted  to  enlighten  all,  is  the  only  national  economy,  and  the  only  other 
is  private  economy. 

This  distinction  of  List  recalls  that  made  by  Rossi,  between  political  eco 
nomy,  pure  or  rational,  and  political  economy,  applied.  Both  of  these 
sciences  have  one  object,  wealth ;  but  the  first  treats  it  in  general  terms 
with  reference  to  men  in  general ;  the  second  in  a  manner  more  special, 
more  national ;  pure  political  economy  overlooks  time,  space,  nationality : 
political  economy  applied  neglects  none  of  these  circumstances.  This  dis 
tinction  seems  no  better  founded  than  the  other :  it  seems  to  have  been 
devised  by  the  able  and  ingenious  Rossi,  to  get  rid  of  some  of  the  absurd 
theorisms  of  his  predecessors.  There  is  but  one  political  economy ;  there 
cannot  be  two  sciences  upon  one  subject.  A  rational  distinction  would  be 
that  between  political  economy  in  theory  and  political  economy  applied; 
the  first  expounding  the  laws  which  preside  over  the  production  and  distri- 


POLITICAL    AND    COSMOPOLITE    ECONOMY.      191 

Adam  Smith  gave  the  same  extension  to  his  doctrine  by  en 
deavoring  to  establish  the  cosmopolitical  idea  of  absolute  free 
trade,  although  he  could  not  but  see  the  gross  offences  of  the 
Physiocrats  against  the  nature  of  things,  and  against  logic. 
Adam  Smith  did  not  propose  any  more  than  Quesnay  to  treat 
of  the  objects  of  political  economy,  or 'of  the  policy  which  each 
country  has  to  pursue  in  improving  its  economical  condition. 
The  title  of  his  work  is,  "  The  Nature  and  Causes  of  the  Wealth 
of  Nations ;"  that  is,  of  all  the  nations  of  the  world.  He  de 
voted  a  portion  of  his  work  to  the  various  systems  of  political 
economy,  but  only  with  the  view  of  showing  of  what  little  value 
they  were,  and  of  proving  that  political  or  national  economy 
ought  to  yield  to  universal  economy.  If  he  sometimes  speaks  J 
of  war,  it  is  merely  in  passing.  The  idea  of  perpetual  peace  is 
the  basis  of  all  his  arguments.  According  to  the  significant 
remark  of  Dugald  Stewart,  his  biographer,  he  has  taken  as  the 
point  of  departure  for  his  researches  the  maxim,  "  that  for  the 
most  part  the  measures  of  governments  for  the  promotion  of 
public  prosperity  are  useless ;  and  that  to  raise  a  State  from  the 
lowest  degree  of  barbarism  to  the  highest  state  of  opulence, 
three  things  only  are  necessary,  moderate  taxation,  a  good  ad 
ministration  of  justice,  and  peace."  Adam  Smith  could  only 
have  had  in  his  mind  the  perpetual  peace  of  the  Abb£  de  St. 
Pierre. 

bution  of  wealth ;  the  second  deducing  from  these  laws  general  precepts. 
The  distinction  corresponding  to  that  between  physiology  in  theory,  and  to 
hygiene  and  therapeutics  in  application.  —  [H.  R.] 

This  note  of  the  intelligent  French  Editor  requires  for  some  readers  a 
word  of  explanation.  It  is  true  that  any  sound  system  of  political  economy 
must  extend  its  view  to  all  people  and  all  nations  ;  but.it  is  just  as  true  that 
it  should  never  lose  sight  of  the  individual  people  and  classes  of  which 
these  nations  are  composed.  National  economy  is  not  the  same  as  private 
economy ;  but  it  must  ever  be  founded  on  and  be  accordant  with  individual 
well-being.  That  system  which  best  promotes  the  true  interests  of  indivi 
duals  in  social  life  or  in  nations,  is  that  which  makes  the  wisest  system  of 
political  economy.  While  the  interests  of  men,  then,  are  studied  as  they 
are  found  in  nations  differently  developed,  their  welfare  must  be  consulted 
as  they  exist  individually  in  each  nation.  —  [S.  C.J 


192  THEORY. 

J.  B.  Say  admits  that  the  idea  of  free  trade  depends  upon  the 
conception  of  an  universal  republic.  This  writer,  who,  after 
all,  has  merely  constructed  a  scientific  building  out  of  the  mate 
rials  furnished  by  Adam  Smith,  says,  in  so  many  words,  in  his 
Practical  Political  Economy*  "  We  may  blend  in  our  consi 
deration  the  family  and  the  head  which  provides  for  its  wants. 
The  principles,  the  observations,  which  concern  them,  constitute 
private  economy  ;  public  economy  embraces  the  observations  and 
the  principles  which  refer  to  the  interests  of  a  particular  nation, 
as  susceptible  of  being  opposed  to  the  interests  of  another  na 
tion.  Political  economy  has  in  view  the  interest  of  all  nations, 
or  of  society  in  general."f 

It  should  be  noticed  here,  that  Say  acknowledges,  under  the 
name  of  public  economy,  the  existence  of  a  national  or  political 
economy,  not  considered  in  his  works,  that  he  gives  the  name 
of  political  economy  to  a  doctrine  evidently  cosmopolitical  in  its 
nature,  and  in  that  doctrine  treats  only  of  that  economy  which 
embraces  the  collective  interest  of  human  kind,  without  consi 
dering  the  separate  interest  of  each  nation. { 

This  confusion  of  terms  would  have  disappeared,  if,  after  de- 

*  Part  9th  of  his  Tableau  General  de  I' Economic  des  Socieles. 

f  This  distinction  of  J.  B.  Say  is  not  more  happy  than  those  upon  which 
we  remarked  in  a  preceding  note.  It  is  evident  that  his  public  economy 
belongs  to  the  domain  of  political  economy,  which  must  be  incomplete  if 
abstraction  be  made  from  it  of  all  the  separate  interests  of  all  the  nations 
which  go  to  make  up  mankind.  —  [H.  R.] 

t  Say  no  doubt  felt  that  some  such  a  distinction  was  necessary  to  secure 
his  system  from  objections  to  which  he  was  made  to  feel  most  acutely  that  it 
was  exposed.  This  and  other  concessions  were  made  to  critics  of  his  work 
at  home,  whilst  it  was  being  received  entire  in  other  countries  without 
explanation  or  caution.  According  to  this  distinction  he  has  not  treated 
the  subject  of  national  or  public  economy.  And  yet  his  disciples  through 
out  the  world  have  understood  his  object  so  little,  that  it  has  everywhere 
been  taught  and  treated  as  a  special  system  of  public  economy;  and 
statesmen  and  nations  are  on  all  sides  invited  to  obey  its  injunctions. 
Nay,  epithets  of  contempt  and  ridicule  have  been  heaped  upon  those  who 
could  not  regard  this  system  of  Say  as  a  manual  for  statesmen,  or  a  safe 
guide  for  national  policy.  It  belongs  rather  to  the  school  of  the  Abb6  de 
St.  Pierre.  —  [S.  C.J 


POLITICAL    AND    COSMOPOLITE    ECONOMY.    -193 

veloping  what  he  calls  political  economy,  which  is  only  cosmo- 
political  economy,  or  the  economy  of  mankind,  Say  had  also 
initiated  us  in  the  principles  of  the  doctrine  which  he  calls  public 
economy,  which  is  merely  the  economy  of  particular  nations,  or 
political  economy.  In  the  definition  or  exposition  of  that  science, 
he  could  scarcely  have  refrained  from  dropping  the  idea  of  a 
nation,  and  from  showing  what  necessary  changes  the  economy 
of  mankind  is  to  undergo  on  account  of  its  being  divided  into 
distinct  nationalities,  forming  a  number  of  powers  and  interests, 
occupying  their  respective  positions  of  national  liberty  as  be 
tween  themselves.  But  by  giving  to  this  economy  of  the  whole 
of  the  human  family  the  name  of  political  economy,  he  saved 
himself  from  such  an  exposition ;  by  a  confusion  of  terms  he 
has  produced  a  confusion  of  ideas,  and  masked  a  series  of  very 
grave  theoretical  errors. 

All  the  later  writers  have  participated  in  that  error.  Sismondi 
calls  political  economy,  "the  science  which  treats  of  human 
happiness."  Thus  Adam  Smith  and  his  disciples  have,  after 
all,  taught  nothing  else  but  what  Quesnay  and  his  school  had 
taught  before  them ;  the  article  in  the  Revue  Methodique  con 
cerning  the  Physiocrats,  employing  nearly  the  same  expression, 
says  that  the  happiness  of  individuals  depends  in  general  upon 
that  of  the  whole  human  family.  The  very  Coryphaeus  of  Ame 
rican  free  trade  in  the  sense  of  Adam  Smith,  Thomas  Cooper, 
President  of  Columbia  College,  does  not  hesitate  to  deny  the 
existence  of  nationality ;  a  nation,  he  says,  is  "  merely  a  gram 
matical  invention,  designed  to  spare  periphrases,  a  nonentity,  a 
thing  that  has  no  existence  except  in  the  brains  of  political 
men."  Cooper  is,  in  this,  perfectly  consistent ;  much  more  so 
than  his  predecessors  and  his  masters ;  for  as  soon  as  the  exist 
ence  of  nations  in  their  separate  conditions  and  individual  in 
terests  is  acknowledged,  the  economy  of  human  society  must  be 
modified  conformably  with  these  separate  interests ;  if  then  it  is 
attempted  to  stigmatize  these  modifications  as  errors,  it  is  skilful 
to  deny  at  once  the  existence  of  nations. 

For  our  part,  we  are  far  from  rejecting  the  theory  of  cosmo- 
political  or  universal  political  economy  as  elaborated  by  the  Say 
13 


194  THEORY. 

school ;  we  only  think  that  political  economy,  or  what  Say  calls 
public  economy,  should  also  be  elaborated  scientifically,  and 
that  it  is  always  better  to  designate  things  by  their  right  names, 
than  to  give  them  denominations  contrary  to  the  meaning  of 
words.* 

If  we  would  remain  faithful  to  logic  and  to  the  nature  of 
things,  social  economy  must  be  distinguished  from  private 
economy ;  and  in  the  latter,  political  or  national,  must  be  dis 
tinguished  from  cosmopolite  economy ;  the  one  taking  its  point 
of  departure  from  the  idea  of  separate  nationality,  shows  how  a 
particular  nation  in  the  actual  condition  of  the  world,  regard 
being  had  to  its  special  circumstances,  may  preserve  and  im 
prove  its  economical  condition ;  the  other  being  a  system  based 
upon  the  hypothesis  that  all  the  nations  of  the  world  form  but 
one  society,  living  in  a  perpetual  peace. 

If  we  assume  with  this  school  an  universal  association  or 
federation  of  all  nations  as  a  guarantee  of  perpetual  peace,  f  the 

*  This  paragraph  is  doubtless  ironical;  but  if  not,  we  are  far  from  ac 
quiescing  in  the  opinion.  The  whole  subject  should  be  distributed  under 
the  name  of  Political,  Public,  or  National  Economy.  —  [S.  C.j 

f  This  remarkable  passage  of  List  may  be  aptly  compared  with  some 
remarks  of  Rossi  in  his  Course  in  the  chapter  on  the  Theory  of  Commercial 
Liberty;  they  begin  thus,  —  "  Let  us  represent  to  ourselves  the  industrial 
and  commercial  world  as  without  a  line  of  separation  or  political  barrier, 
as  if  for  economical  purposes,  the  different  nationalities  of  people  were 
wholly  effaced."  After  having  sketched  the  state  of  things  which  would  be 
produced  in  that  case,  unfortunately,  as  he  admits,  mere  romance,  the  skilful 
economist  develops  with  power  the  argument  drawn  from  the  different  na 
tionalities,  and  takes  his  position  upon  that  point  of  view.  In  another 
chapter  upon  the  colonial  system,  he  expresses  himself  in  these  terms : — 
"  We  repeat  it,  sufficient  scope  has  not  been  given  in  our  theory  to  the  fact 
of  nationality.  Whilst  practical  men  have  exaggerated  this  even  to  the 
extent  of  wishing  to  make  of  every  nation  an  association  of  monopolists 
in  permanent  war  or  rivalry  with  all  the  rest  of  humanity,  the  theorists 
have  completely  forgotten  or  overlooked  nationality."  These  are  very 
nearly  the  words  of  List  in  this  work.  Rossi  was  acquainted  with  the 
German  language,  and,  as  he  informs  us  in  his  Course  of  Political  Economy, 
was  a  reader  of  the  Trimonthly  German  Review,  —  was  he  not  then  con 
versant  with  the  views  of  List  ?— If  theorists  have  forgotten  nationality,  it 
is  not  because  they  are  wanting  in  patriotism ;  in  demanding  free  trade 


POLITICAL    AND    COSMOPOLITE    ECONOMY.      195 

principle  of  free  trade  among  nations  would  be  fully  established. 
The  less  an  individual  is  restricted  in  the  pursuit  of  well-being, 
the  richer  and  more  numerous  those  with  whom  he  is  in  rela 
tions,  the  wider  is  the  scope  of  his  activity,  the  easier  and  more 
effective  will  be  the  employment  of  the  faculties  with  which 
nature  has  endowed  him  in  the  improvement  of  his  condition, 
and  the  more  available  to  the  same  end  will  be  his  acquired 
knowledge  and  talents,  and  all  other  powers  which  may  be  at 
his  disposal.  As  with  individuals,  so  with  districts  and  pro 
vinces.  It  would  be  folly  to  maintain  that  commercial  union  is 
less  advantageous  than  interior  custom-houses  would  be  to  the 
United  States  of  North  America,  to  the  provinces  of  France, 
and  to  those  of  the  German  confederation. 

The  United  Kingdoms  of  Great  Britain  and  Ireland  present  a 
striking  and  decisive  example  of  the  immense  results  of  free 
trade  between  associated  nations.* 

the  most  unlimited,  they  have  always  believed,  right  or  wrong,  that  they 
were  promoting  the  best  interests  of  their  country.  —  [H.  R.] 

*  We  cannot  agree  that  free  trade  with  Great  Britain  has  been  any  ad 
vantage  to  Ireland:  on  the  contrary,  it  has  injured  that  country,  and  re 
tarded  its  progress  in  wealth,  power,  and  civilization,  beyond  all  estimate. 
That  some  benefit  may  have  accrued  with  all  this  injury,  need  not  be  dis 
puted  ;  but  it  certainly  cannot  readily  be  appreciated.  It  is  equally  true 
that  the  evils  of  Ireland  have  not  all  come  from  free  trade,  but  that  a  very 
large  proportion  have  thus  had  their  origin  and  growth,  is  plain  from  the 
condition  of  industry  and  labor.  There  is  no  civilized  country  in  which 
there  is  less  diversity  of  employment.  Ireland  is  merely  an  outlying  farm 
of  England,  cultivated  merely  to  suit  the  trade  with  England,  and  not  with 
a  view  to  the  best  interests  of  the  population ;  that  is,  such  articles  are 
cultivated  as  will  bear  transportation  to,  and  sell  in  England.  The  industry 
of  the  country  is  narrowed  down  to  agriculture,  and  that  is  narrowed  to  the 
consumption  of  Great  Britain.  The  increasing  population  being  confined 
to  husbandry,  agricultural  labor  increased  and  cheapened,  until  it  could 
scarcely  live  on  land  producing  abundance ;  that  is,  although  the  land  pro 
duced  sufficient  to  feed  the  inhabitants,  they  could  not  earn  enough  at  agri 
cultural  wages  to  purchase  food ;  and  when  the  rot  seized  the  potato,  their 
chief  food,  a  famine  ensued  which  carried  off  more  than  a  million  of  souls, 
and,  including  those  who  were  driven  off  by  its  terrors,  depopulated  Ire 
land  to  the  extent  of  two  millions.  This  event  is  a  disgrace  to  modern 


196  THEORY. 

Suppose  a  similar  association  among  all  the  nations  of  the 
world,  and  the  liveliest  imagination  could  not  fancy  the  sum  of 
civilization.  If  the  industry  of  Ireland  is  not  varied,  the  same  causes  will 
produce  similar  results  within  a  few  generations. 

So,  free  trade  with  the  Northern  States  has  been  a  serious  injury  to  the 
Southern  States  of  this  Union.  The  leading  statesmen  and  politicians  of  the 
South  have  not  dwelt  upon  this  in  the  long  catalogue  of  their  sufferings,  for 
the  reason  that  they  have,  for  a  whole  generation,  been  violent  advocates 
of  free  trade  with  foreign  nations.  The  men  of  the  South  are  now  living, 
who  may  live  to  see  and  acknowledge  their  great  mistake  in  embracing  the 
theory  of  free  trade,  and  supporting  it  as  the  policy  of  the  nation.  We 
think  the  South  has  suffered,  and  that  the  North  has  profited,  by  this  inter 
nal  free  trade,  to  an  extent  truly  lamentable  on  the  one  hand,  and  truly 
astonishing  on  the  other.  The  South  has  suffered  from  many  causes,  but 
the  chief  are  the  rapid  dispersion  of  the  planters  in  the  old  States,  and  the 
consequent  utter  prostration  of  the  value  of  lands  and  of  fortunes  in  those 
States,  and  free  trade  with  the  North.  Being  so  abundantly,  promptly, 
and  cheaply  supplied  with  every  variety  of  goods,  as  well  as  food  from  the 
North  and  West,  the  South  has  attempted  to  live  and  flourish  upon  cotton 
or  sugar.  This  effort,  from  the  beginning  down  to  this  time,  has  been  ac 
companied  by  loud  and  incessant  complaints.  The  sugar  of  Louisiana  has 
encountered  that  of  Cuba,  and  the  cotton  being  nearly  the  sole  product  of 
millions  of  laborers,  has  been  forced  upon  the  market  in  such  enormous 
quantities,  that  the  manufacturer  has  fixed  the  price,  and  not  the  planter. 
The  manufacturers,  mechanics,  merchants,  and  farmers  of  the  North,  have 
made  far  larger  gains  for  each  head,  than  the  planter  of  the  South. 

It  would  require  no  very  great  variation  in  the  industrial  and  commercial 
policy  of  the  planters  to  make  a  vast  change  in  results.  If  the  planters 
were  less  dependent  on  the  northern  markets  they  could  purchase  cheaper, 
and  they  could  at  any  time  realize  more  money  from  a  three-quarter  crop 
of  cotton  than  from  a  full  one.  The  position  of  industry  in  the  South  is 
difficult  and  peculiar.  Unable  to  resort  to  those  commercial  and  industrial 
restrictions  by  which  they  can  save  themselves  from  being  inundated  with 
commodities  from  the  North  and  West,  and  enforce  some  diversity  in  their 
industry,  they  are  obliged  to  drift  in  their  policy  wherever  the  chances  of 
the  current  may  carry  them.  But  it  is  clear,  notwithstanding  their  fierce 
advocacy  of  free  trade,  that  the  planters  are  not  without  some  suspicion  of 
the  true  nature  of  their  troubles.  Else,  whence  these  commercial  conven 
tions,  this  struggle  to  get  their  own  business  in  their  own  hands,  to  have 
their  own  commerce  in  their  own  ports,  to  export  their  own  cotton  and 
import  their  own  supplies  of  foreign  goods.  All  their  complaints  on  this 
head,  all  their  struggles  for  commercial  independence,  all  their  conventions, 
reports  and  protests  are  a  mighty  and  unanswerable  response  to  their  theory 
of  free  trade.  According  to  this  theory,  it  is  all  right  as  it  is— men  understand 
their  own  interests  best.  New  York  is  the  real  commercial  capital,  and 


POLITICAL    AND    COSMOPOLITE    ECONOMY.    197 

human  well-being  and  enjoyments  which  it  would  procure  for 
the  human  family.* 

The  idea  of  a  confederation  of  all  nations,  and  of  a  perpetual 
peace,  are  both  clearly  taught  by  reason  and  religion. f  If  duels 
between  individuals  are  unreasonable,  how  much  more  duels  be 
tween  nations !  The  proofs  which  social  economy  draws  from 
the  history  of  civilization  in  favor  of  some  general  association 
of  men  under  one  system  of  law,  are  sufficiently  striking  to  in 
fluence  men  of  sound  understanding. 

there  the  money  and  business  should  concentrate,  and  there  should  a  large 
portion  of  the  profits  of  Southern  labor  flow  into  the  pockets  of  Northern 
merchants.  If  the  South  were  in  a  condition  to  protect  themselves  by 
legislation  from  these  real  evils,  who  can  doubt  that  a  legislative  remedy 
would  be  applied  on  the  first  opportunity  ?  If  the  industrial  conventions 
which  have  met  in  the  South  could  have  imposed  commercial  restrictions 
against  Northern  trade,  who  can  doubt  that  it  would  have  been  done  despite 
the  fallacies  of  Smith  and  Say?  And  it  would  have  been  wisely  and  pro 
perly  done.  They  are  now  merely  seeking  expedients  to  accomplish  by 
voluntary  action  what  they  have  no  power  to  enforce  by  legislation.  But 
they  are  constantly  hampered  and  confused,  both  in  their  reasoning  and 
in  their  action,  by  the  glaring  inconsistency  between  their  avowed  doctrines 
and  their  true  policy. 

Free  trade  is  not  now  and  never  was  the  true  policy  of  the  United  States, 
and  whilst  the  industry  of  the  whole  country  is  protected  from  the  cheaper 
labor  of  the  rest  of  the  world,  some  device  should  be  sought  as  a  compensa 
tion  for  the  evils  inflicted  on  the  South  by  free  trade  with  the  North.  The 
South  cannot  diversify  her  labor,  which  is  indispensable  to  her  prosperity,*' 
so  long  as  the  whole  of  her  territory  is  kept  saturated  with  Northern  goods. 
How  can  a  cotton  factory  at  the  South  struggle  into  success,  when  its  only 
market  is  filled  with  goods  of  older  factories  ?  It  would  be  both  right  and 
wise  to  give  public  aid  to  every  branch  of  industry  suited  to  Southern 
labor,  let  the  money  come  whence  it  might.  The  heavy  cotton  goods,  at 
least,  should  be  made  in  Southern  mills.  —  [S.  C.] 

*  We  cannot  concur  in  this.  If  all  nations  were  alike  able  to  endure 
competition,  a  universal  and  destructive  rivalry  would  take  place,  and  pro 
tection  would  become  universal,  or  laborers  would  suffer.  —  [S.  C.] 

f  The  Christian  religion  teaches  perpetual  peace.  But  before  the 
prophecy,  "  there  shall  be  but  one  shepherd  and  one  flock,"  shall  be  fulfilled, 
there  is  much  to  learn  in  the  practice  of  the  great  Quaker  doctrine.  There 
is  no  better  proof  of  the  divinity  of  the  Christian  religion  than  to  find  its 
teachings  and  its  prophecies  in  as  perfect  accordance  with  all  the  exigen 
cies  of  the  true  material  prosperity  of  men  as  it  is  with  their  right  moral 
developments. 


198  THEOEY. 

History  teaches  us  that  in  a  state  of  war  human  welfare  is  at 
its  lowest  degree,  and  that  it  rises  in  proportion  as  the  associa 
tions  of  society  increase.  In  a  primitive  state  of  the  human 
race,  we  fin  d  only  families ;  afterwards  come  cities,  then  confede 
rations  of  cities,  then  the  union  of  a  whole  country,  and  finally, 
the  association  of  many  States  under  one  constitution.  If  the 
nature  of  things  has  been  strong  enough  to  extend  to  hundreds 
of  millions  the  association  which  commenced  with  families  only, 
we  may  imagine  that  its  energy  might  suffice  to  effect  the  union 
of  all  nations.  If  the  human  mind  has  been  able  to  appreciate 
the  benefits  of  society  upon  such  a  large  scale,  we  may  regard 
it  as  capable  of  comprehending  the  advantage  of  an  association 
embracing  the  whole  of  humanity.  A  multitude  of  symptoms 
reveal  this  tendency.  It  may  suffice  to  recall  the  progress 
made  in  science,  art,  industry,  and  social  organization.  We  can 
now  predict,  with  certainty,  that,  in  some  ten  years,  owing  to 
improved  means  of  communication,  civilized  nations  will  be  as 
closely  united  in  their  relations,  both  material  and  moral,  and 
even  more  so.  than  the  different  counties  of  England  were  a 
century  since.  The  governments  of  continental  nations  already 
possess,  in  the  telegraph,  the  means  of  conferring  together 
almost  as  readily  as  if  they  were  upon  the  same  spot.  Powerful 
forces  hitherto  unknown  have  already  elevated  industry  to  a 
^  development  beyond  all  expectation,  and  others  still  more  pow 
erful  are  giving  tokens  of  their  appearance.  But  as  industry 
advances,  and  becomes  diffused  throughout  different  countries, 
war  is  rendered  very  improbable,  if  not  impossible.  Two 
nations  equally  advanced  in  industry,  can  mutually  inflict 
greater  injuries  in  one  week  than  they  can  repair  in  the  space 
of  a  generation.  Consider  also,  that  these  new  powers,  hitherto 
specially  devoted  to  production,  will  not  refuse  their  energies  to 
the  work  of  destruction,  and  that  they  may  be  used  for  the  purpose 
of  defence  generally ;  but  especially  are  they  at  the  service  of 
the  continental  nations  of  Europe,  even  to  the  threatened 
result  of  depriving  Great  Britain  of  the  defensive  advantages 
arising  from  her  insular  position.  In  the  Congress  of  its  great 
powers,  Europe  possesses  already  the  embryo  of  a  future  Con- 


POLITICAL    AND    COSMOPOLITE    ECONOMY.    199 

gress  of  Nations.  Henceforward,  the  tendency  to  adjust  public 
differences  by  means  of  protocols,  must  prevail  over  that  of 
extorting  justice  by  force  of  arms.  More  correct  ideas  on  the 
subject  of  wealth  and  industry  are  now  prevalent,  and  the  best 
minds  throughout  the  world  are  convinced  that  the  civilization 
of  barbarous  and  half-barbarous  people,  the  restoring  nations 
which  have  retrograded,  and  the  foundation  of  colonies,  offers 
to  the  more  advanced  nations  a  field  for  the  development  of  their 
productive  power,  far  more  promising  and  satisfactory  than  war 
or  hostile  commercial  regulations.  In  proportion  as  this  con 
viction  becomes  established,  and  as  the  means  of  communication 
shall  open  between  civilized  and  uncivilized  nations,  the 
former  will  more  fully  comprehend  that  the  civilization  of  bar 
barous  people  and  nations  rent  by  long-continued  anarchy- or 
oppressed  by  bad  governments,  is  a  mission  worthy  of  great 
national  efforts,  a  mission  which  belongs  to  all,  and  which  can 
only  be  accomplished  by  associated  efforts. 

It  seems  to  be  an  unalterable  law  of  our  nature,  an  instinct 
of  humanity  which  prompts  or  stimulates  civilized  nations,  to 
extend  their  power  over  people  of  less  culture :  hence  we  may 
infer  that  the  civilization  of  all  nations  and  the  culture  of  all 
the  world  and  its  inhabitants  is  the  true  mission  of  national 
power  and  intelligence.  On  all  sides  we  observe  population, 
intellectual  power,  and  material  capital,  increasing  under  the 
influence  of  civilization  to  the  point  of  being  forced  forward 
upon  other  less  civilized  countries.  When  the  soil  can  no  longer 
feed  its  population  nor  give  employment  to  those  who  dwell 
upon  its  surface,  the  unemployed  must  go  to  distant  countries, 
seeking  more  fruitful  fields ;  when  talents  and  industrial 
capacity  no  longer  obtain  a  sufficient  compensation  by  reason  of 
an  over-supply,  they  emigrate,  seeking  homes  where  their 
services  may  be  in  demand ;  when,  from  the  accumulation  of 
material  capital,  the  rate  of  interest  falls  so  low  that  small 
capitalists  can  no  longer  live,  they  too,  must  emigrate  to  poorer 
countries  for  more  profitable  investments. 

The  system  of  Say  or  his  school  rests,  therefore,  upon  a  true 
idea,  an  idea  that  science,  if  faithful  to  its  vocation  of  aiding  • 


200  THEORY. 

the  practical,  must  admit  and  elaborate ;  an  idea  that  practice 
cannot  disregard  without  going  astray.  This  School  has,  how 
ever,  neglected  to  take  into  account  separate  nationalities,  their 
interests,  their  particular  condition,  and  to  reconcile  them  to 
the  idea  of  universal  union  and  perpetual  peace.* 

The  School  has  admitted  as  realized  a  state  of  things  to  come. 
It  presupposes  the  existence  of  universal  association  and  per 
petual  peace,  and  from  it  infers  the  great  benefits  of  free  trade. 
It  confounds  thus  the  effect  and  the  cause.     A  perpetual  peace 
exists  among  provinces  and  states  already  associated ;  it  is  from 
that  association  that  their  commercial  union  is  derived :  they  owe 
to  perpetual  peace  in  the  place  they  occupy,  the  benefits  which 
it  has   procured   them.     History  proves    that   political   union 
j  always   precedes   commercial   union.     It   does   not  furnish  an 
instance  where  the  latter  has  had  the  precedence.    In  the  actual 
state  of  the  world,  free  trade  would  bring  forth,  instead  of  a 
.   community  of  nations,  the  universal  subjection  of  nations  to  the 
J  supremacy  of  the  greater  powers  in  manufactures,   commerce, 
and  navigation.     The  reasons   for  this  opinion   are  not  only 
strong,  but  in  our  view  beyond  all  dispute. 

An  universal  republic,  as  it  was  understood  by  Henry  IV., 

*  We  must  again  express  our  dissent.  There  are  doubtless  many  truths 
and  many  valuable  materials  in  the  works  of  Say  and  those  who  support  his 
system.  But  it  is  conceding  far  too  much  to  say  it  reposes  upon  a  true 
idea.  Say  was  by  far  too  logical  a  writer  not  to  have  constructed  a  better 
Bystem  if  he  had  started  from  a  true  idea.  Even  a  true  idea  becomes  false 
when  placed  in  a  wrong  connection.  He  began  with  wealth  and  ended 
with  wealth.  If  wealth  be  wholly  abstracted  from  considerations  of  human 
welfare,  it  becomes  an  absurdity.  No  science  or  system  can  be  predicated 
of  wealth  apart  from  its  use  as  a  means  to  human  welfare.  If,  then,  wealth  is 
only  a  means  of  benefit  to  men,  it  can  be  considered  as  no  more  than  one  of 
the  means  for  this  end,  and  it  must,  in  its  production,  distribution,  and 
consumption,  be  kept  strictly  in  subordination  to  that  end.  Wealth  is 
then  only  secondary  in  its  nature.  The  real  element  of  political,  or  social,  or 
public  economy  is  human  well-being.  From  this  point  must  every  system 
spring,  and  from  this  starting-point  must  all  its  developments  be  made. 
The  system  of  which  Say  is  the  founder,  called  byA  List  the  School, 
does  not  repose  upon  this  basis,  nor  develop  from  this  starting-point.  It 
has  a  false  starting-point,  therefore,  and,  so  far  as  it  is  consistent,  its 
elaborations  are  either  false  or  misapplied.  —  [S.  C.] 


POLITICAL    AND    COSMOPOLITE    ECONOMY.    201 

and  by  the  Abbe*  de  St.  Pierre,  that  is,  an  association  in  which 
all  nations  should  mutually  acknowledge  the  same  legal  authority 
and  renounce  the  right  of  enforcing  justice,  as  between  them 
selves,  is  realizable  only  so  far  as  a  certain  number  shall  have 
reached  the  same,  or  nearly  the  same  degree  of  industry,  civili 
zation,  political  education,  and  power.  Free  trade  can  be 
extended  only  by  the  gradual  progress  of  such  an  union ;  it  is 
only  by  it  that  nations  can  obtain  the  great  benefits  of  which 
associated  states  and  provinces  offer  us  in  our  time  such  an 
example.  The  protective  system  is  the  only  means  by  which 
nations  less  advanced  can  be  raised  to  the  level  of  that  nation 
which  enjoys  a  supremacy  in  manufacturing  industry  —  a  mono 
poly  not  conferred  by  nature,  but  seized  by  being  first  on  the 
ground ;  the  protective  system,  regarded  from  this  point  of  view, 
will  be  the  most  effective  promoter  of  universal  association  among 
nations,  and  consequently  free  trade.  And  from  this  point  of 
view,  political  economy  is  a  science  which  regards  existing  in 
terests  and  the  special  condition  of  nations,  shows  how  each  one 
may  arrive  at  that  degree  of  economical  development,  to  which 
association  with  nations  of  equal  culture  and  advantages,  free 
trade  included,  may  by  any  possibility  carry  a  nation. 

But  the  School  has  confounded  the  two  doctrines;  it  commits 
the  grand  error  of  applying  to  the  condition  of  different  coun 
tries  principles  strictly  cosmopolite,  and  at  the  same  time  of 
disregarding,  from  political  considerations,  the  cosmopolite  ten 
dency  of  productive  power. 

It  is  from  having  overlooked  the  cosmopolite  tendency  of 
productive  power  that  Malthus  has  fallen  into  the  error  of 
wishing  to  restrain  the  increase  of  population ;  that  more  re 
cently  Chalmers  and  Torrens  have  conceived  the  strange  idea^ 
that  the  augmentation  of  capital  and  of  production,  without 
bounds,  were  evils  to  which  the  public  interests  demand  a  limit ; 
that  Sismondi  has  declared  manufactures  to  be  injurious  to 
society.*  This  theory  may  be  compared  to  Saturn :  it  devours 

*  In  every  science,  and  especially  every  one  that  has  not  reached  its  full 
development,  some  groping  in  the  dark  will  be  detected  among  those  who 
cultivate  it ;  some  opinions  must  be  hazarded,  and  some  errors  committed ; 


202  THEORY. 

its  own  children ;  in  the  development  of  population,  capital,  and 
machinery,  it  finds  the  division  of  labor,  and  explains  by  that 

but  the  errors  must  belong  to  the  individuals,  and  the  truths  to  the  science. 
Thus  science  has  not  admitted  the  uneasiness  of  some  minds  on  the  subject 
of  a  pretended  excess  of  production,  an  uneasiness  which  List  properly 
regards  as  strange,  and  to  which  Say  has  done  full  justice  in  his  theory  of 
markets.  Science  has,  in  like  manner,  rejected  the  exaggerated  specula 
tions  upon  political  economy,  of  a  man  who,  by  important  historical  labors, 
has  acquired  a  reputation  which  has  given  these  writings  but  too  much  in 
fluence  even  among  persons  of  distinguished  intelligence.f  As  to  the 
speculations  of  Malthus  upon  population,  science  having  rectified  some  of 
his  formula,  has  adopted  them  as  a  whole. 

It  is  to  be  regretted  that,  at  a  time  when  it  is  attempted  to  destroy,  by 
the  epithet  Malthusian,  the  influence  of  all  who  accept  not  the  Utopian  reve 
ries  of  the  day,  we  find  the  authority  of  an  eminent  man  on  the  side  of 
the  declaimers.  But  List  has  spoken  of  the  theory  of  Malthus  under  the 
influence  of  generous  but  not  well-considered  feelings,  rather  than  as  the 
result  of  an  attentive  examination  which  he  had  never  made.  Doubtless 
the  world  we  inhabit  presents  vast  spaces  still  uncultivated ;  and  the  pro 
duction  of  articles  of  food,  and  consequently  of  population,  is  susceptible 
of  an  immense  increase ;  it  is  not  the  less  true  that  the  progress  of  popula 
tion  ought  not  to  precede  that  of  production ;  sound  morals  does  not  the 
less  require  of  a  man  not  to  yield  blindly  to  his  appetites  like  a  brute,  and 
an  enlightened  charity  ought  none  the  less  to  recommend  prudence  to  the 
working  classes  in  the  matter  of  marriage,  as  the  essential  condition  of 
their  independence  and  their  well-being. 

In  some  lessons  of  his  Course  of  Political  Economy,  and  in  his  introduc 
tion  to  the  work  of  Malthus,  Rossi  has  treated  this  subject  with  a  lofty 
intelligence,  and  with  a  true  sympathy  for  the  best  interests  of  the  laboring 
population.  —  [H.  R.] 

The  above  is  less  to  our  taste  than  any  note  of  Richelot  in  the  whole 
volume.  It  seems  to  imply  that  the  prevalence  of  Utopian  or  socialistic 
^  writings  in  France  has  driven  the  more  intelligent  and  sensible  men  to 
embrace  the  worse  than  Utopian  speculations  of  Malthus ;  they  have  even 
gone  so  far  as  to  adopt  the  whole  of  Malthus,  with  slight  exception,  into 
the  science  of  political  economy.  Who  has  adopted  it?  The  disciples  of 
Say ;  for  they  alone  hold  the  keys  of  the  science.  There  is  no  other  system 
which  claims  the  dignity  of  a  science.  We  can  only  say  that  if  this  science 

f  We  think  the  world  would  do  far  better  to  heed  the  suggestions  and  warnings  of 
Sismondi,  who  is  here  referred  to,  than  to  accept  and  obey  the  so-called  science  of 
Say.  Sismondi  is  an  eloquent  and  earnest  friend  of  humanity  —  Say  is  a  writer  upon 
wealth,  apart  from  humanity.  —  [S.  C.j 


POLITICAL    AND    COSMOPOLITE    ECONOMY/    203 

law  the  progress  of  society,  and  then  begins  to  regard  population, 
capital,  machinery,  as  monsters  threatening  the  prosperity  of 

were  not  destined  by  its  own  defects  to  unavoidable  destruction,  it  would 
inevitably  sink  with  Malthus  on  board.  We  needed  no  Malthus  to  inform 
the  world  that  if  population  increased  faster  than  food,  people  might  come 
to  want,  or  even  starve  ;  nor  that  men  in  humble  life,  dependent  upon  daily 
wages  for  a  living,  should  be  prudent  in  the  matter  of  marriage.  That 
much  was  known  before  by  those  who  never  dreamed  of  any  obligations  to 
science  for  the  knowledge.  Indeed  it  would  be  hard  to  tell  why  prudence 
in  dress,  in  eating  and  drinking,  is  not  as  much  within  the  domain  of  poli 
tical  economy  as  prudence  in  marriage ;  for  prudence  in  the  one  case  con 
cerns  wealth,  and  in  the  other  population.  Our  objection  to  Malthus's 
doctrine  is,  that  it  is  but  the  essence  of  the  fatal  policy  of  England  in  re 
gard  to  the  working  classes,  rendered  into  good  English  and  the  phraseology 
of  science.  Malthus  having  assumed  that  the  economical  policy  of  England 
was  as  it  should  be,  and  finding  in  England  a  vast  multitude  of  men  and 
women  who  were  wretched,  destitute  and  poor,  degraded  and  miserable,  de 
pendent  upon  labor  for  a  living,  and  unable  to  find  labor,  residents  of  poor- 
houses,  and  living  upon  public  alms,  given  as  grudgingly  as  ever  taxes  were 
paid,  took  all  this  as  a  natural  and  necessary  condition  of  things,  and  applied 
himself  to  the  demonstration  that  population  had  overtaken  and  passed  pro 
duction  in  England,  and  that  such  was  its  tendency  everywhere.  All  this  was 
in  defiance  of  the  capacity  of  England  to  feed  and  maintain  comfortably 
many-fold  its  present  population.  It  is  already  more  than  double  what  it 
was  when  Malthus  wrote.  If  the  whole  soil  of  England  had  belonged  to 
ten  land-holders,  and  if  it  had  only  suited  their  views  to  have  it  occupied 
by  a  population  of  a  million,  then  Malthus  would  have  decided,  and  the 
science  of  the  School  would  have  adopted  the  decision,  that  all  the  people 
born  over  and  above  the  million,  were  supernumeraries,  and  a  proof  that 
population  was  transcending  its  proper  scientific  limits.  And  if  the  ten 
land-holders  should  persist  in  limiting  the  production  of  food  to  what 
sufficed  for  the  million,  then  science  would  be  ready  to  decide  that  produc 
tion  had  been  overtaken  by  population.  Malthus  assumed  the  fact  of 
pauperism  to  be  proof  of  over-population.  We  cannot  agree  that  in  any 
sense  there  is  science  or  philosophy  in  this  method.  The  dictate  of  true 
philosophy  or  science  would  be  to  enquire  first,  what  was  the  economical 
cause  of  this  pauperism  and  deficiency  of  food  in  a  country  capable  of 
sustaining  a  population  many  times  greater ;  and  secondly,  what  policy  or 
economical  system  was  best  fitted  to  restore  the  equilibrium  between  food 
and  population,  and  to  provide  for  the  well-being  of  that  increase  of  popu 
lation  which  would  be  sure  to  follow  a  wise  and  skilful  administration  of 
public  affairs.  We  say  that  economical  science  must  be  exclusively  directed 
to  the  exigencies  of  progress  in  human  affairs,  —  to  the  exigencies  of  in- 


204  THEORY. 

nations ;  for  regarding  in  this  case  only  the  actual  condition  of 
a  par-ticular  nation,  it  loses  sight  of  the  state  of  the  world  and 
the  future  progress  of  mankind. 

It  is  not  true  that  population  increases  with  more  rapidity 
than  subsistence  ;  at  least  it  is  folly  to  admit  that  disproportion, 
and  to  attempt  the  proof  by  means  of  intricate  calculations  and 
mere  sophisms,  so  long  as  the  earth  offers  an  amount  of  unem 
ployed  forces  great  enough  to  feed  ten,  perhaps  an  hundred  fold 
more  inhabitants  than  now  occupy  it- 
It  is  but  a  narrow  view  of  the  subject  to  assume  the  actual 
capacity  of  productive  power  as  the  measure  for  the  number  of 
men  who  may  find  subsistence  upon  a  given  space.  The  savage, 
the  hunter,  and  the  fisherman,  could  not,  in  their  mode  of  calcu 
lation,  find  room  sufficient  upon  the  whole  earth  for  more  than  a 
million  of  men,  the  shepherd  for  more  than  ten  millions,  the 
unskilled  farmer  for  more  than  a  hundred  millions ;  and  yet 
Europe  alone,  in  our  day,  feeds  a  population  of  two  hundred 
millions  of  inhabitants.  The  cultivation  of  potatoes  and  plants, 
suited  for  the  food  of  cattle,  with  other  recent  improvements 
in  agriculture,  have  increased  ten-fold  the  power  of  men  for  the 
production  of  food.  In  England,  during  the  Middle  Ages,  an 
acre  of  land  yielded  in  wheat  four  for  one ;  now  it  yields  from  ten 
to  twenty  for  one,  and  five  times  more  land  has  been  brought 
under  cultivation.  In  several  European  countries,  the  natural 
fertility  of  which  is  the  same  as  that  of  England,  the  actual 
product  does  not  exceed  four  for  one.  Who  can  assign  limits 
to  the  discoveries,  inventions,  and  progress  of  mankind  ? 
Agricultural  chemistry  is  still  in  its  infancy.  Who  can  say  if 
to-morrow  shall  not  bring  forth  a  new  discovery  or  some  new 
process,  which  may  quadruple,  if  not  decuple  the  fecundity  of 

creasing  population,  industry,  productive  forces,  wealth,  power,  trade,  do 
mestic  and  international.  Science  must  first  announce  the  whole  law  of 
economical  progress  to  its  utmost  limits,  before  it  grapples  with  the  law 
determining  the  policy  of  nations  which  have  reached  their  grand  climac 
teric.  Malthusian  science  can  never  be  applicable  until  the  law  or  science 
of  progress  is  exhausted ;  and  then  it  will  never  be  heard  of,  if  Christianity 
has  a  voice  in  deciding  the  questions  it  propounds  and  discusses.  —  [S.  C.] 


I 

POLITICAL    AND    COSMOPOLITE    ECONOMY.     205 

the  soil  ?  Artesian  wells  have  already  furnished  the  means  of 
transforming  thirsty  solitudes  into  fertile  fields.  How  many  new 
elements  may  yet  be  buried  in  the  bowels  of  the  earth ! 

Suppose  that  some  new  discovery  should  enable  men  to  pro 
duce  heat  at  pleasure,  and  at  a  very  low  cost,  without  recourse 
to  any  fuel  actually  known,  how  much  land  would  not  that  dis 
covery  bring  into  culture,  and  in  what  an  incalculable  propor 
tion  would  not  the  productive  power  of  any  given  space  be 
increased  ?  If  the  theory  of  Malthus  appears  narrow  in  its 
tendencies,  it  is  also  in  its  means  contrary  to  nature,  destructive 
to  moral  energy  —  in  one  word,  horrible  !  It  destroys  a  motive 
employed  by  nature  to  stimulate  men  to  effort  of  body  and  mind, 
to  awaken  and  to  exalt  their  noblest  feelings,  a  motive  to  which 
the  human  race  owes  the  most  of  its  progress.  It  enacts  into 
law  the  harshest  egotism,  it  asks  us  to  shut  our  hearts  and  our 
hands  against  the  hungry,  for  in  giving  them  food  and  drink,  we 
may  be  the  cause,  perhaps,  that  thirty  years  hence  another  may 
be  famished.  It  substitutes  calculation  for  pity.  Such  a  doctrine 
would  change  the  hearts  of  men  into  stones.  And  what  should 
we  expect  from  a  people  with  hearts  of  stone,  but  the  complete 
ruin  of  morals,  and  consequently,  the  destruction  of  productive 
power,  the  loss  of  capital,  civilization,  and  the  political  power  of 
the  country? 

If  the  population  of  a  country  exceeds  the  production  of  sub 
sistence,  if  capital  increases  so  as  no  longer  to  find  employment, 
if  the  use  of  machinery  deprives  multitudes  of  work,  if,  finally, 
manufactured  products  encumber  the  store-houses,  it  is  a  proof 
that  nature  intends  not  industry,  civilization,  riches,  and  power, 
to  be  the  exclusive  portion  of  any  single  people,  sa  long  as  a 
large  portion  of  the  surface  of  the  earth  suitable  for  tillage 
shall  be  inhabited  by  savage  animals,  and  the  greatest  part  of 
the  human  race  shall  be  plunged  in  barbarism,  ignorance,  and 
misery. 

We  have  just  exhibited  the  errors  into  which  this  school  of 
economists  has  fallen,  by  considering,  from  a  political  point  of 
view,  the  productive  power  of  man.  Let  us  now  point  out  those 


206  THEORY. 

which  it  has  committed  by  regarding  the  particular  interest  of 
nations,  from  a  point  of  view  wholly  cosmopolite. 

If  there  existed  such  a  confederation  of  nations  as  that  of 
the  United  States  of  North  America,  the  surplus  of  population, 
talents,  industry,  power,  and  material  capital,  would  flow  from 
England  toward  and  over  the  continent,  just  as  it  now  flows 
from  the  Eastern  States  of  the  American  Union  to  and  over  the 
Western  States,  only  upon  the  condition,  however,  that  the 
countries  of  the  continent  could  offer  the  same  security  to  per 
sons  and  property,  the  same  constitution,  the  same  general  laws, 
and  that  the  English  government  could  be  subjected  to  the  col 
lective  authority  of  a  general  confederation.  In  such  an 
hypothesis,  there  could  be  no  better  means  of  elevating  those 
countries  to  the  degree  of  wealth  and  civilization  which  England 
has  attained,  than  free  trade ;  such  is  the  argument  of  the 
School.  But  in  the  actual  state  of  the  world,  what  would  be 
the  effect  of  such  a  free  trade  ? 

The  English  nation,  as  an  independent  and  isolated  nation, 
should  take  its  own  interest  as  the  governing  rule  of  its  policy ; 
Englishmen,  attached  to  their  bank,  to  their  laws,  to  their  insti 
tutions  and  habits,  should,  as  much  as  possible,  employ  their 
means  and  capital  in  the  industry  of  their  own  country ;  free 
trade,  by  opening  all  the  countries  of  the  world  to  the  products 
of  English  manufactures,  would  encourage  their  policy ;  they 
would  not,  in  such  case,  be  apt  to  entertain  the  idea  of  estab 
lishing  manufactures  in  France  or  in  Germany.  Any  surplus 
of  capital  would  be  of  course  applied  in  England  to  the  promo 
tion  of  external  commerce.  If  obliged  to  emigrate  with  the 
view  of  investing  capital  abroad,  as  is  the  case  in  our  day,  they 
would  prefer  to  the  continental  nations  of  their  vicinity,  remoter 
countries,  where  they  would  find  their  own  language,  their  laws, 
and  their  institutions.  England  would  thus  become  one  immense 
central  manufacturing  city.  Asia,  Africa,  and  Australia,  would 
be  civilized  by  her,  and  be  covered  with  new  States  after  her 
own  image.  In  the  course  of  time,  under  the  presidency  of 
the  mother  country,  would  come  forth  a  world  of  English  states, 
in  which  the  nations  of  the  European  continent  would  be  lost  as 


POLITICAL    AND    COSMOPOLITE    ECONOMY.     207 

insignificant  and  sterile  races.  France  would  share  with  Spain 
and  Portugal  the  mission  of  supplying  the  English  world  with 
the  best  wines,  and  of  drinking  themselves  the  worst ;  at  the 
most,  she  might  retain  the  manufacture  of  a  few  articles  for  the 
world  of  fashion.  Germany  would  have  nothing  to  furnish 
this  English  world  but  toys  for  children,  wooden  clocks,* 
philological  writings,  and,  now  and  then,  a  body  of  auxiliaries, 
destined  to  be  killed  or  consumed  in  some  desert  of  Asia  or 
Africa,  in  a  struggle  to  extend  the  manufacturing  and  com 
mercial  supremacy,  the  literature  and  the  language  of  England. 
Not  many  centuries  hence  in  that  English  world,  the  Germans 
and  the  French  may  be  spoken  of  with  altogether  as  much 
respect  as  we  speak  now  of  Asiatic  nations. 

But  political  science  teaches  that  this  development  by  the 
help  of  free  trade,  is  contrary  to  nature.  If  in  the  time  of  the 
Hanseatic  League,  so  it  argues,  free  trade  had  been  estab 
lished,  German,  instead  of  English  nationality,  would  have 
taken  the  start  of  all  others  in  commerce  and  in  manufactures. 
It  would  be  supremely  unjust  to  attribute  to  the  English,  from 
cosmopolitical  considerations,  all  the  wealth  and  all  the  power 
of  the  globe,  solely  because  they  first  developed  their  own  com 
mercial  system,  and  beyond  any  other  people  have  disregarded 
the  cosmopolite  principle.  To  the  end  that  free  trade  may  ope 
rate  naturally,  it  is  necessary  that  the  nations  less  advanced 
than  England,  should  be  raised  by  artificial  means  to  the  same 
degree  of  development  at  which  England  has  arrived  artificially. 
Through  fear  that  in  virtue  of  this  cosmopolite  tendency  of 
productive  power,  upon  which  we  have  just  remarked,  distant 
countries  should  be  sooner  improved  than  the  nations  of  con 
tinental  Europe,  those  nations  which  are  certain,  that  from  their 
moral,  intellectual,  social,  and  political  state,  they  can  become 
manufacturing  communities,  should  at  once  have  recourse  to 
the  protective  system  as  to  the  only  means  of  attaining  this 
end.  The  effects  of  the  protective  system  are  displayed  in  two 
ways :  first,  by  excluding,  gradually,  foreign  products  from  our 

*  This  article  should  be  omitted.  New  England  has  now  nearly  all  that 
trade. 


208  THEORY. 

own  markets,  we  produce  in  other  countries  a  surplus  of  labor, 
of  industrial  power  and  capital,  which  must  look  abroad  for  em 
ployment  ;  secondly,  by  premiums  offered  for  the  emigration  of 
laborers,  industrial  skill  and  capital,  we  attract  to  our  own 
country  that  surplus  of  productive  power,  which  would  otherwise 
retreat  to  distant  regions  or  colonies. 

Public  policy  sends  us  to  history  for  the  proof,  and  asks  if 
England  has  not  drawn  to  her  shores  in  that  manner  an  immense 
amount  of  productive  power  from  Germany,  Italy,  Holland, 
Belgium,  France,  and  Portugal.  It  asks  why  the  cosmopolite 
school,  in  comparing  the  inconveniences  and  the  advantages  of 
the  protective  system,  entirely  overlooks  that  great  result. 


CHAPTER  II. 

THE  THEORY  OF  PRODUCTIVE  FORCES  AND  THE  THEORY  OF 

VALUES. 

THE  celebrated  work  of  Adam  Smith  is  entitled  :  The  Nature 
and  Causes  of  the  Wealth  of  Nations.  The  founder  of  the  reign 
ing  school  has  thus  indicated  with  exactness  the  double  point  of 
view  under  which  the  economy  of  nations,  as  well  as  that  of 
individuals,  is  to  be  considered.  The  causes  of  wealth  are  quite 
a  different  thing  from  wealth  itself.  An  individual  may  possess 
wealth,  that  is,  exchangeable  values ;  but  if  he  is  not  able  to 
produce  more  values  than  he  consumes,  he  will  be  impoverished. 
An  individual  may  be  poor,  but  if  he  can  produce  more  than  he 
consumes,  he  may  grow  rich. 

The  power  of  creating  wealth  is  then  vastly  more  important 
than  wealth  itself;  it  secures  not  only  the  possession  and  the 
increase  of  property  already  acquired,  but  even  the  replacing 
of  that  which  is  lost.  If  this  be  so  with  mere  individuals,  how 
much  more  is  it  true  with  nations,  which  cannot  live  upon  their 
own  income  !  Germany  has  been  in  every  age  wasted  by  pesti 
lence,  famine,  or  civil  and  foreign  war,  but  has  always  preserved 


PRODUCTIVE  FORCES  AND  VALUES.     209 

the  greater  part  of  her  productive  power,  and  thus  has  always 
quickly  recovered  her  prosperity ;  whilst  Spain,  rich  and  pow 
erful,  but  trampled  upon  by  despots  and  priests,  Spain,  in  full 
possession  of  internal  peace,  has  sunk  into  constantly  increasing- 
poverty  and  misery.  The  same  sun  still  shines  upon  the  Span 
iards,  they  possess  still  the  same  soil,  their  wines  are  as  rich 
as  ever,  they  are  still  the  same  people  as  before  the  discovery 
of  America,  and  before  the  establishment  of  the  Inquisition; 
but  Spain  has  lost  by  degrees  her  productive  power,  and  has 
thus  become  a  poor  and  miserable  country.  The  war  of  eman 
cipation  cost  the  Colonies  of  North  America  hundreds  of  mil 
lions,  but  their  independence  increased  so  immensely  their  pro 
ductive  power,  that  a  few  years  of  peace  added  to  their 
wealth  greater  possessions  than  they  before  enjoyed.  Compare 
the  state  of  France  in  1809,  with  that  of  1839 :  what  a  differ 
ence  !  And  yet  France,  since  1809,  has  lost  a  considerable  part 
of  the  European  continent,  has  undergone  two  devastating 
invasions,  and  paid  millions  upon  millions  for  the  expenditures 
of  war.  \ 

A  penetrating  mind  like  that  of  Adam  Smith,  could  not 
entirely  overlook  the  difference  between  wealth  and  its  causes ; 
nor  the  decisive  influence  of  these  causes  upon  the  condition 
of  nations.  In  his  introduction,  he  distinctly  announces  that : 
"  Labor  is  the  fund  which  originally  supplies  a  nation  with  its 
wealth ;  and  the  abundance  or  scantiness  of  the  annual  supply 
must  depend  principally  upon  the  actual  state  of  the  skill,  dex 
terity  and  judgment  with  which  labor  is  applied,  the  productive 
power  of  labor,  and  upon  the  proportion  between  the  number  of 
those  who  are  annually  employed  in  a  useful  labor  and  those  who 
are  not  so  employed."  It  is  easy  to  see  that  Adam  Smith  per 
fectly  understood  that  the  welfare  of  nations  depends  chiefly 
on  the  amount  of  their  productive  power. 

But,  it  appears  not  to  be  in  the  order  of  nature  that  a  science 
shall  come  forth  complete  from  the  head  of  any  single  philoso 
pher.  It  is  but  too  evident  that  the  cosmopolite  idea  of  the 
Physiocrats,  universal  free  trade,  and  that  really  great  discovery 
of  the  division  of  labor,  preoccupied  him  too  much  to  allow  the 
14 


210  THEORY. 

pursuit  of  the  idea  of  productive  power.  However  great  the 
obligations  of  science  to  him  in  other  respects,  the  discovery 
of  the  division  of  labor  was  in  his  own  eyes  the  strongest  of  his 
titles  to  public  favor.  It  was  to  make  the  reputation  of  his 
work,  and  the  celebrity  of  his  name.  Too  shrewd  not  to  under 
stand,  that  he  who  is  about  to  sell  a  precious  stone  of  great  value 
does  not  carry  the  jewel  to  market  in  a  sack  of  wheat,  however 
useful  that  grain  may  be  in  its  place,  he  knew  better  how  to 
exhibit  his  commodity ;  having  too  much  experience  to  be  igno 
rant  that  a  debutant  (and  he  was  but  a  debutant  in  political 
economy  when  he  published  his  work),  who  is  fortunate  enough 
to  make  a  strong  impression  in  the  first  act,  obtains  easily  all 
needed  indulgence  in  the  following  acts,  if  he  but  keeps  himself 
above  mediocrity,  he  wisely  commenced  his  work  with  the  doc 
trine  of  the  division  of  labor.  Smith  was  not  mistaken  in  his 
calculation ;  his  first  chapter  made  the  fortune  of  his  book,  and 
established  his  authority.* 

We  believe  ourselves  safe  in  affirming,  indeed,  that  it  was  the 
desire  of  bringing  into  favorable  light  the  important  discovery 
of  the  division  of  labor  which  hindered  Adam  Smith  from  pur- 

*  Adam  Smith  is  well  known  not  to  have  been  the  discoverer  of  the 
division  of  labor,  either  as  a  fact  or  principle.  His  merit  was  in  the  appli 
cation  of  it  in  a  treatise  upon  political  economy.  The  fact  and  principle 
are  both  so  obvious  to  practical  men,  and  even  to  careless  observers,  that  it 
would  be  vain  to  inquire  who  was  the  discoverer.  It  had  been  referred  to 
distinctly,  by  various  writers,  long  before  the  time  of  Adam  Smith.  A 
passage  from  the  works  of  the  Chinese  sage,  Mencius,  who  lived  some  two 
thousand  years  ago,  may  suffice  as  an  example.  "  Does  the  farmer,"  asked 
Mencius,  "  weave  the  cloth  or  make  the  cap  which  he  wears  ?  No  ;  he  gives 
grain  in  exchange.  Why  does  he  not  make  them  himself?  It  would  injure 
his  farming.  Does  he  make  his  own  cooking-vessels,  or  iron  implements 
for  farming?  No;  he  gives  grain  in  barter  for  them;  the  labor  of  the 
mechanic  and  that  of  the  husbandman  ought  not  to  be  united.  "Then," 
says  Mencius,  "  are  the  governments  of  the  empire  and  the  business  of  the 
farmer  the  only  employments  that  may  be  united  ?  There  are  employments 
proper  to  men  of  superior  station,  as  well  as  to  those  in  inferior  conditions. 
Hence,  it  has  been  observed,  some  labor  with  their  minds,  and  some  with 
their  bodies.  Those  who  labor  with  their  minds  rule,  and  those  who  labor 
with  their  bodies  are,  ruled." —  [S.  C.] 


PRODUCTIVE  FORCES  AND  VALUES.     211 

suing  the  idea  of  productive  power,  announced  in  his  introduction, 
and  so  often  reproduced  by  the  way,  it  is  true,  in  the  rest  of  his 
book ;  and  which  prevented  him  from  giving  to  his  whole  book 
a  more  perfect  form.  The  high  estimate  placed  by  him  upon 
his  idea  of  the  division  of  labor,  led  him  to  represent  labor  as 
the  basis  of  the  wealth  of  nations,  though  he  had  seen  clearly, 
and  though  he  declares  that  the  productiveness  of  labor  depends 
on  the  degree  of  skill  and  intelligence  with  which  it  is  directed. 
We  ask,  then,  is  it  reasoning  scientifically,  to  offer  as  the  cause 
of  a  phenomenon  that  which  is  merely  the  result  of  a  multitude 
of  more  profound  causes  ? 

It  is  beyond  all  doubt,  that  riches  can  only  be  acquired  by 
the  means  of  the  mind  and  of  the  body,  or  of  work ;  but  that  is 
not  assigning  a  cause  from  which  useful  deductions  may  be 
drawn ;  for  history  shows  that  nations  have  sunk  into  poverty 
and  misery  despite  the  labor  and  economy  of  their  citizens.  He 
who  wishes  to  learn  how  one  nation  may  have  risen  from  poverty 
and  barbarism  to  opulence  and  civilization,  and  how  another  has 
fallen  from  wealth  and  prosperity  into  poverty  and  misery,  simply 
from  the  doctrine,  that  labor  is  the  cause  of  wealth,  and  idleness 
is  the  parent  of  poverty,  (a  remark  made  by  Solomon,  before 
Adam  Smith,)  will  not  fail  to  put  this  new  question,  What,  then, 
is  the  cause  of  labor,  and  what  that  of  idleness  ?  The  head,  the 
hands,  and  the  feet  of  men  might  be  given  with  more  accuracy 
as  causes  of  wealth.  At  least,  this  would  be  much  nearer  the 
truth ;  the  point  of  the  question  would  then  be  to  know  why 
these  heads,  hands  and  feet  applied  themselves  to  the  worl^  of 
production,  and  why  their  efforts  were  successful.  What  is  it 
but  the  mind  which  animates  individuals  ?  What  is  it  but  social 
order  which  makes  their  activity  fruitful,  and  their  natural 
powers  efficient  ?  The  better  a  man  comprehends  what  he  owes 
to  the  future,  the  more  his  ideas  and  feelings  lead  him  to  secure 
a  favorable  position  in  life  for  those  nearest  to  him,  and  to  make 
them  happy;  the  more  he  is  accustomed  from  childhood  to 
reflection  and  activity — the  more  his  generous  instincts  have 
been  cultivated,  and  his  body  and  mind  exercised — the  more 
advantage  he  had  in  early  life  of  fine  examples — the  more  occa- 


212  THEORY. 

sion  lie  had  to  employ  his  intellectual  and  physical  powers  for 
the  amelioration  of  his  lot,  the  less  is  he  checked  in  his  proper 
sphere  of  activity,  the  happier  are  his  efforts,  and  the  more 
assured  are  the  results ;  the  more  order  and  activity  give  him 
a  title  to  respect  and  public  consideration,  the  less  is  his  mind  a 
prey  to  prejudices,  .superstition,  error  and  ignorance ;  finally, 
the  more  he  applies  his  mind  and  members  to  production,  the 
more  will  he  be  able  to  produce,  and  the  more  assuredly  will  he 
reap  the  reward  of  his  labor.  In  all  these  respects  the  principal 
thing  is  the  condition  of  society  in  which  the  individual  has  been 
brought  up,  and  in  which  he  moves.  It  is  important  to  know 
if  science  and  art  flourish  in  them ;  if  institutions  and  laws 
favor  religious  sentiment,  morality  and  intelligence,  security  for 
person  and  property,  liberty  and  justice ;  if  in  the  country  all 
the  elements  of  material  prosperity,  agriculture,  manufacturing 
industry,  and  commerce,  are  equally  and  harmoniously  developed ; 
if  national  power  is  strong  enough  to  secure  to  individuals  the 
transmission  of  material  and  moral  progress  from  one  generation 
to  another,  and  to  enable  them,  not  only  to  employ  the  whole 
national  power  of  a  country,  but  also,  by  means  of  external  com 
merce  and  colonies,  to  employ  the  national  power  of  foreign 
countries. 

Adam  Smith  has  so  little  understood  the  nature  of  those 
powers  in  general  that  he  does  not  even  consider  as  productive 
the  intellectual  efforts  of  those  who  are  engaged  in  administer 
ing  justice,  and  preserving  order,  giving  instruction,  upholding 
religion,  or  cultivating  science  and  art.  His  researches  are 
limited  to  that  activity  of  men  wrhich  produces  material 
values.  He  acknowledges  that  the  productive  power  of  that 
activity  depends  on  the  skill  and  intelligence  with  which  it  is 
applied ;  but  his  investigations  as  to  the  causes  of  that  skill  and 
intelligence  do  not  lead  him  beyond  the  division  of  labor,  which 
he  explains  only  by  exchange,  by  increase  of  material  capital, 
and  by  the  extension  of  markets.  Thus  his  doctrine  becomes 
more  and  more  materialist,  special,  and  individual.  Had  he 
pursued  the  idea  of  productive  power  without  suffering  himself 
to  be  controlled  by  that  of  value,  exchangeable  value,  he  would 


PRODUCTIVE    FORCES    AND    VALUES.  213 

have  comprehended  that  at  the  side  of  a  theory  of  values 
there  is  required  an  independent  theory  of  productive  power  to  * 
explain  economical  phenomena.  But  he  went  so  far  astray  as 
to  explain  the  moral  powers  by  purely  material  circumstances, 
and  from  this  error  springs  all  the  absurdities,  all  the  contradic 
tions,  of  which  his  school  has  been  guilty  down  to  this  day,  as 
will  be  seen,  and  which  are  the  chief  reasons  why  the  teachings 
of  political  economy  have  found  so  little  favor  with  the  best 
minds.  Smith's  school  teaches  little  else  but  the  theory  of 
value ;  he  draws  from  this  idea  of  exchangeable  value,  that  which 
serves  as  the  basis  of  his  doctrine,  and  the  very  definition  which 
he  gives  of  the  science. 

According  to  J.  B.  Say,  this  science  teaches  how  riches  or 
exchangeable  values  are  produced,  distributed,  and  consumed. 
It  is  evidently  not  the  science  which  explains  how  productive 
power  or  forces  are  awakened  and  maintained,  and  how  they 
are  repressed  or  annihilated.  McCulloch  calls  it  expressly 
the  science  of  values,  and  recent  English  authors  designate  it 
by  the  name  of  the  science  of  exchange.* 

*  There  are  many  observations  to  be  made  upon  this  passage.  I  admit 
•willingly  that  Adam  Smith  has  not  drawn  all  the  conclusions  possible  from 
the  idea  of  productive  force ;  but,  so  far  from  having  overlooked  it,  he  has 
clearly  stated  it.  What  is  his  division  of  labor  but  an  efficacious  means  of 
augmenting  productive  power?  Does  he  not  frequently  recur  to  general 
security  as  a  necessary  condition  to  the  productiveness  of  labor?  Although 
Adam  Smith  has  not  scientifically  established  that  labor  is  the  sole  source 
of  wealth,  and  although  to  designate  wealth  he  has  habitually  employed 
the  expression,  the  annual  product  of  labor  and  of  the  earth,  List  with  bad 
grace  disputes  the  honor  with  him  of  having  first,  as  against  the  Physio 
crats,  who  denied  the  agency  of  labor  in  the  production  of  wealth,  restored 
labor  to  its  true  position  and  agency.  He  is  unfortunate  also  in  his  criti 
cism  upon  Say  and  McCulloch. 

The  definition  of  political  economy  by  Say  remains  to  this  day  the  most 
perfect  which  has  appeared ;  it  can  only  be  shortened  by  simply  saying 
that  political  economy  is  the  science  of  the  production  and  the  distribution 
of  riches.  It  implies  nothing  contrary  to  the  ideas  of  the  author  of  the 
National  System;  wealth  is  indisputably  the  object  of  political  economy; 
but  taking  this  position  by  no  means  hinders  any  one  from  preferring  to 
wealth  the  forces  or  power  which  produce  it. 

As  to  McCulloch,  after  having  defined  the  science  nearly  in  the  words  of 


214  THEORY. 

Examples  drawn  from  private  economy  will  bring  into  full 
>  light  the  difference  between  the  theory  of  productive  power  and 

Say,  he  adds,  (page  3  of  his  Principles,}  "Political  economy  may  be  called 
the  science  of  values,  for  no  object  without  value  can  be  included  in  the 
circle  of  its  investigation."  McCulloch,  distinguishing  value  from  utility, 
means  here  simply  to  eliminate  as  strangers  to  political  economy,  the 
wealth  which  nature  lavishes  prodigally  upon  all,  and  to  which  labor,  or  at 
least  appropriation,  has  added  no  exchangeable  value.  He  then  assigns  as 
the  mission  of  political  economy,  an  inquiry  into  the  means  of  increasing 
the  productive  power  of  labor. 

J.  Stuart  Mill  has  pointed  out  the  vice  of  that  definition  by  which  some 
English  writers  have  made  political  economy  the  science  of  exchanges ;  he 
has  established  that  the  laws  of  production  would  be  the  same,  were  there 
*  no  exchange  of  products  ;  and  that  although  the  remuneration  of  labor  in 
our  social  condition  depends  upon  the  price  of  merchandise,  exchange  is 
no  more  the  fundamental  law  of  distribution  than  roads  and  carriages  con 
stitute  the  law  of  movement.  The  two  essential  facts  of  political  economy 
are  the  production  and  the  distribution  of  riches ;  and  these  alone  should 
appear  in  the  definition. 

However  this  may  be,  the  absolute  distinction  between  the  theory  of 
values  and  that  of  productive  forces,  appears  to  me  no  more  tenable  than 
that  in  the  preceding  chapter  between  political  economy  and  cosmopolite 
economy ;  it  can  only  serve,  as  did  the  latter,  to  make  more  distinct  the 
errors  and  omissions  of  the  predecessors  of  List.  All  the  treatises  upon 
political  economy  contain  an  analysis  such  as  that  of  the  productive  forces  ; 
but  it  is  very  true  that  the  economists,  and  the  best  of  them,  have  carried 
into  the  science  a  narrow  mind,  and  that  they  have  been  too  exclusively 
preoccupied  with  the  actual  gains  or  the  immediate  loss  of  values.  How 
ever,  in  place  of  constructing  a  new  theory  at  the  side  of  a  theory  already 
existing,  the  object  should  be  purely  and  simply  to  enlarge  this  one  by 
giving  it,  in  place  of  a  limited  point  of  view,  a  wider  range  of  observation. 
In  the  succeeding  paragraph,  List  places,  in  a  striking  light,  the  difference 
between  the  one  and  the  other.  —  [II.  R.] 

List  is  no  more  the  discoverer  of  the  theory  of  productive  forces  than 
Adam  Smith  was  of  the  division  of  labor.  Adam  Smith  applied  to  his 
system  the  division  of  labor ;  List  has  applied  the  principle  of  productive 
forces,  which  Smith  had  merely  noticed.  Smith's  system  is  so  incomplete, 
without  this  application  which  List  has  first  fully  made,  that  we  must  sup 
pose  he  could  not  have  appreciated  it.  As  an  element  it  is  of  far  greater 
importance  than  the  division  of  labor,  because  it  includes  it. 

Definitions  are  dangerous  ground  for  the  later  disciples  of  Say.  The 
definitions  of  the  followers  of  Smith  and  Say  so  run  into  each  other,  and  so 
cross  each  other,  that  no  possible  ingenuity  can  ever  disentangle  or  recon- 


PRODUCTIVE  FORCES  AND  VALUES.     215 

the  theory  of  values.  If  of  two  fathers  of  families,  both  pro 
prietors  of  land,  each  saving  yearly  the  sum  of  one  thousand 
dollars,  and  each  having  five  sons,  the  one  invests  his  savings 
in  keeping  his  sons  at  manual  labor,  whilst  the  other  employs  his 
savings  in  making  two  of  his  sons  intelligent  agriculturists,  and 
in  preparing  the  three  others  for  professional  life,  conformably  to 
their  several  aptitudes,  the  first  acts  according  to  the  theory 
of  values,  and  the  second  according  to  that  of  productive  powers. 
At  the  time  of  his  death  the  former  will  be  richer  than  the  latter 
in  exchangeable  values,  but  as  to  productive  power  the  contrary 
will  be  the  case.  The  estates  of  the  one  will  be  divided  into 
two  parts,  each  of  which  being  skilfully  worked  will  give  a  net 
product  equal  to  the  whole  before,  at  the  same  time  the  three 
other  sons  would  have  in  their  talents  ample  means  of  living. 
The  estate  of  the  other  would  be  divided  into  five  parts,  each  of 
which  would  continue  to  be  as  badly  cultivated  as  the  whole  had 
been  before.  In  one  family  a  great  amount  of  moral  power 
would  have  been  developed,  and  many  talents  destined  to  in- 

cile  them.  Say's  definition  is  undoubtedly  a  good  one  of  Say's  system,  but 
there  are  so  many  differences  among  his  disciples,  that  it  is  far  from  being 
suitable  for  all.  In  one  respect  they  all  agree,  and  that  upon  a  point  which 
is  the  fatal  error  of  all.  They  describe  a  science  of  wealth,  or  of  values, 
or  of  exchanges,  or  of  production,  without  reference  to  the  secondary  cha 
racter  of  all  these  things  as  means  to  human  welfare.  For  our  part,  we 
reject  all  definitions  and  systems  which  do  not  expressly  recognize  the  con. 
nection  of  human  welfare  with  the  subject.  When  we  meet  a  definition 
running  thus,  The  science  of  human  well-being  in  its  relations  with  the  pro 
duction  and  distribution  of  wealth,  we  shall  begin  to  hope  the  science  of 
social,  or  political,  or  national  economy,  is  commencing  to  assume  its  proper 
proportions. 

The  definition  of  J.  Stuart  Mill,  above  mentioned,  aims  a  heavy  blow  at 
free  trade.  According  to  the  authority  of  the  school  of  Say,  free  trade  is 
the  sole  arbiter  of  production.  Let  free  trade  prevail,  they  say,  and  the 
whole  progress  of  production  and  distribution  will  proceed  with  perfect 
success  and  advantage.  Mill,  however,  declares  that  exchange,  that  is, 
trade,  is  not  a  fundamental  law  of  production,  which  is  the  same  with  or 
without  trade;  this  sweeps  off  at  once  the  whole  theory  of  free  trade. 
Followed  out  to  its  results,  this  position  would  be  equally  destructive  to 
Say's  system ;  for  it  is  wholly  dependent  upon  free  trade  for  all  the  life 
there  is  in  it.  —  [S.  C.] 


216  THEORY. 

crease  from  generation  to  generation,  each  succeeding  generation 
possessing  larger  resources  for  the  acquisition  of  wealth  than 
the  one  preceding.  In  the  other  family,  on  the  contrary,  stu 
pidity  and  poverty  would  increase  in  proportion  as  the  estate 
became  more  and  more  divided.*  It  is  in  this  way  the  planter 
increases,  by  means  of  his  slaves,  the  quantity  of  his  exchange 
able  values,  but  ruins  the  productive  power  of  succeeding  gene 
rations.  Every  expense  for  the  instruction  of  youth,  for  the 
Maintenance  of  justice,  for  the  defence  of  the  country,  is  a 
destruction  of  values  for  the  benefit  of  productive  power.  The 
greatest  part  of  the  consumption  of  a  country  has  for  its  object 
the  education  of  the  coming  generation,  the  care  of  the  future 
productive  power. 

Christianity,  monogamy,  the  abolition  of  slavery,  and  qualified 
servitude,  hereditary  thrones,  the  invention  of  printing,  of  posts, 
of  coinage,  of  weights  and  measures,  of  calendaring,  of  watches, 
the  police,  the  enfranchisement  of  lands,  and  the  vastly  improved 
means  of  transportation,  are  rich  sources  of  productive  power. 
To  be  convinced  of  it  we  need  only  compare  Europe  with  Asia. 
To  have  a  just  idea  of  the  influence  of  liberty  of  thought  and 

*  In  the  lecture  already  cited  on  the  subject  of  commercial  liberty,  Rossi 
employs  the  same  illustration  of  two  fathers  of  families,  and  the  sacrifices 
they  are  willing  to  make  in  view  of  the  future,  under  another  form,  it  is 
true,  but  for  the  purpose  of  furnishing  a  reason  for  temporary  exceptions 
to  the  rule  of  free  trade.  "  In  an  economical  point  of  view,  to  ask  if  the 
principle  of  free  trade  admits  exceptions,  is  the  same  thing  as  to  ask  if 
there  are  circumstances  in  which  the  restrictions  may  augment  the  sum  of 
national  wealth.  Now,  if  it  is  meant  by  this  immediate  augmentation,  then 
it  may  be  said,  such  circumstances  can  never  occur.  No  one  can  ever  be 
enriched  at  once  by  paying  a  high  price  for  that  which  he  can  purchase 
cheaper.  But  there  is  not  a  father  of  a  family  who  does  not  know  that  a 
sacrifice  to-day  may  be  followed  by  a  benefit  to-morrow,  which  not  only 
compensates,  but  even  exceeds  the  outlay.  An  administration  at  once 
prudent  and  enlightened  makes  experimental  efforts  and  advances  which 
cannot  always  be  immediately  remunerative.  There  is  no  father  of  a  family 
who,  if  he  had  strong  reasons  to  believe  in  the  existence  of  valuable  mines 
on  his  domain,  who  would  not  feel  himself  obliged,  if  he  had  the  means,  to 
make  some  attempts  to  verify  the  fact,  and  open  to  his  children  this  new 
source  of  prosperity.  The  same  thing  is  true  of  a  nation."  —  [H.  R.] 


PRODUCTIVE  FORCES  AND  VALUES.     217 

liberty  of  conscience  upon  the  productive  power  of  a  nation,  we 
need  only  read  successively  the  History  of  England  and  the 
History  of  Scotland.  Publicity  of  judicial  decisions,  trial  by 
jury,  enactment  of  laws  by  a  parliament,  a  government  subject 
to  public  control,  the  local  administration  of  towns  and  corpora 
tions  by  themselves,  the  liberty  of  the  press,  freedom  of  associa 
tion  for  purposes  of  general  utility,  all  these  impart,  in  constitu 
tional  states  to  the  citizens  as  well  as  to  the  government,  an 
energy  and  power  which  could  scarcely  be  acquired  by  any  other 
means.  No  law  or  public  institution  can  be  imagined  but  must 
have  more  or  less  influence  upon  the  increase  or  the  decrease  of 
productive  power.* 

If  bodily  labor  be  designated  as  the  only  producer  of  riches, 
how  can  it  be  explained  that  modern  nations  are' incomparably 
richer,  more  populous,  more  powerful  and  prosperous  than  the 
nations  of  antiquity  ?  Among  the  ancients,  there  was  relatively 
to  the  whole  population  many  more  laborers  employed.  The 
labor  was  much  harder,  land  was  cultivated  in  larger  parcels, 
and  yet  the  mass  of  citizens  was  worse  fed,  worse  clad,  than  in 
modern  times.  This  is  explained  by  the  progress  of  past  ages  in 
science  and  art,  in  what  concerns  the  family  and  the  nation,  in 
intellectual  culture,  and  in  productive  capacity,  f  The  actual 
condition  of  nations  is  the  result  of  an  accumulation  of  dis 
coveries,  inventions,  improvements,  the  efforts  of  all  previous 

*  Say  tells  us,  in  his  Economic  Politique  Pratique,  "  that  laws  cannot 
create  wealth."  That  is  true  ;  but  they  can  create  productive  forces  more 
important  than  riches,  or  the  possession  of  exchangeable  values. 

f  As  to  the  development  of  productive  power  in  modern  society,  I  refer 
the  reader  to  the  second  lecture  of  the  Course  of  Political  Economy,  by 
Michel  Chevalier,  for  the  years  1841-2.  We  find  there,  that  the  increase 
of  this  productive  power  in  the  manufacture  of  iron  in  four  or  five  hundred 
years,  is  as  1  to  25  or  30;  in  the  manufacture  of  flour,  the  progress  has 
been,  since  the  days  of  Homer,  as  1  to  144 ;  in  cotton  fabrics,  as  1  to  320 
in  seventy  years ;  and  in  the  spinning  of  flax,  as  1  to  240  within  a  few 
years ;  that  in  America,  in  the  transportation  of  goods,  productive  force 
has  increased,  since  the  time  of  Montezuma,  as  1  to  11,500.  — H.  K.] 

This  comparison  is  between  what  one  man  could  do  at  the  times  men 
tioned,  and  what  one  man  can  do  now  with  all  modern  facilities  and  ma 
chinery.  —  [H.  R. 


218  THEORY. 

generations  ;  it  is  that  which  constitutes  the  intellectual  capital 
of  the  living  race  of  men,  and  a  nation  is  productive  only  in 
proportion  as  it  is  able  to  assimilate  or  digest  these  conquests 
of  anterior  generations,  and  to  increase  them  by  its  own  acqui 
sitions.  This  productiveness  will  be  modified,  of  course,  by 
natural  resources,  by  the  extent  and  geographical  position  of 
territory,  the  number  of  inhabitants,  and  their  political  power ; 
by  capacity  for  improving  within  national  limits,  in  a  superior 
and  harmonious  manner,  every  branch  of  labor,  and  extending 
moral,  intellectual,  industrial,  commercial,  and  political  influence 
over  less  advanced  nations  and  over  the  world  in  general. 

The  School  would  persuade  us  that  politics  and  the  government 
of  the  State  have  nothing  in  common  with  political  economy. 
In  so  far  as  it  limits  its  researches  to  values  and  to  exchange, 
this  may  be  right ;  it  may  be  possible  to  define  value,  capital, 
profits,  wages,  and  rent,  and  to  analyze  and  ascertain  their 
elements,  to  examine  the  causes  which  determine  their  variations 
without  taking  into  account  political  circumstances.  But  there 
is  obviously  an  element  of  private  or  individual  economy  in  this 
economy  of  nations.  It  suffices  to  read  the  history  of  Venice, 
of  the  Hanse  Towns,  of  Portugal,  Holland,  and  England,  to 
understand  how  far  individual  wealth  and  political  power  act 
and  react  upon  each  other.  Wherever  that  reciprocity  of  action 
is  manifested,  the  School  falls  into  the  strangest  contradictions. 
We  shall  confine  ourselves  to  a  remark  upon  Adam  Smith's 
singular  opinion  of  the  English  Navigation  Act. 

Not  perceiving  the  true  nature  of  productive  power,  and  not 
embracing  the  various  kinds  of  civilization,  the  School  overlooks  in 
particular  the  importance  of  a  parallel  development  of  agricul 
ture,  manufacturing  industry,  and  commerce,  public  power,  and 
national  wealth,  and  above  all,  of  an  independent  manufacturing 
industry,  developed  in  all  its  branches.  It  commits  the  error 
of  classifying  manufacturing  industry  with  agriculture,  and  of 
speaking  in  general  terms  of  labor,  natural  power,  capital,  etc., 
without  taking  into  consideration  the  differences  which  exist 
between  them.  It  does  not  perceive  that  between  a  country 
merely  agricultural  and  a  country  manufacturing  and  agricultu- 


PRODUCTIVE    FORCES    AND    YALUES.  219 

ral,  the  difference  is  much  greater  than  between  a  pastoral 
people  and  an  agricultural  people.  Where  mere  agriculture  is 
the  exclusive  employment  of  the  people,  we  find  despotism  or 
abitrary  rule  and  servitude,  superstition  and  ignorance,  the 
want  of  civilization,  trade,  and  means  of  transportation.  In  a 
country  wholly  agricultural,  a  very  small  portion  only  of  the 
intellectual  and  corporeal  powers  of  the  people  is  evoked  and 
developed,  the  smallest  part  of  its  natural  powers  is  brought  into 
exercise,  and  there  is  none,  or  very  little  increase  or  accumula 
tion  of  capital.  Compare  Poland  with  England ;  both  countries 
were  formerly  in  the  same  stage  of  culture ;  but  what  a  difference 
at  present !  Manufactures  and  manufactories  are  the  mothers  and 
the  daughters  of  civil  liberty,  of  intelligence,  of  arts  and 
sciences,  of  external  and  internal  trade,  of  shipping  and  im 
proved  means  of  transport,  of  navigation  and  political  power. 
They  are  the  chief  means  of  emancipating  agriculture,  of  raising 
it  to  the  rank  of  an  industry,  of  an  art  or  a  science,  of  increas 
ing  the  rent  of  land,  agricultural  profits,  the  wages  of  laborers 
and  the  value  of  land.  The  School  has  attributed  the  chief 
civilizing  power  to  external  trade,  and  has  thus  mistaken  an 
intermediate  step  for  a  cause.  They  are  foreign  manufacturers 
who  furnish  to  foreign  commerce  the  goods  it  brings  to  us,  and 
which  consume  the  agricultural  products  and  raw  materials 
which  we  deliver  in  exchange.  If  dealings  with  distant  manu 
facturers  have  such  a  beneficial  influence  upon  agriculture, 
how  much  more  profitable  and  advantageous  must  be  an 
exchange  with  manufacturers  united  in  bonds  of  intimacy  at 
once  local,  commercial,  and  political,  who  purchase  from  us  not 
merely  a  small  part,  but  almost  all  the  food  and  raw  materials 
they  consume  —  products  not  enhanced  in  price  to  either  party  by 
expenses  of  distant  transportation.  Manufacturers,  whose  're 
lations  with  us  are  not  liable  to  be  interrupted  by  the  opening 
of  new  markets  in  foreign  countries,  nor  by  war,  nor  by  com 
mercial  regulations  of  countries  not  under  our  control. 

We  see  now  into  what  errors,  into  what  strange  contradictions 
the  School  has  fallen  from  having  confined  its  researches  to  ma- 


220  «   ¥  THEORY. 

terial  riches  or  to  exchangeable  values,  and  from  considering 
bodily  labor  as  the  only  productive  power. 

According  to  it,  he  who  raises  swine  is  accounted  a  productive 
member  of  society ;  he  who  raises  men  is  unproductive  ;  he  who 
manufactures  for  sale  bag-pipes  or  jews-harps,  is  a  producer ; 
the  greatest  musicians  are  not,  because  what  they  play  cannot 
be  exhibited  in  market.  The  physician  who  saves  his  patient, 
does  not  belong  to  the  productive  class,  but  the  druggist's  boy 
belongs  to  it,  though  the  exchangeable  values  or  the  pills  which 
he  makes  have  but  a  few  minutes  of  existence  before  they  are 
destroyed.  A  Newton,  a  Watt,  a  Kepler,  are  not  as  productive 
as  an  ass,  a  horse,  or  an  ox,  laborers  whom  McCulloch  has 
recently  placed  in  the  rank  of  productive  members  of  human 
society. 

Think  not  that  J.  B.  Say,  by  his  fiction  of  immaterial  pro 
ducts,  has  corrected  this  error  of  Adam  Smith ;  he  only  masks 
the  absurdity  of  its  consequences,  but  has  not  rescued  the  doc 
trine  from  the  materialism  with  which  it  is  imbued.  In  his  view, 
intellectual  or  immaterial  producers  are  only  productive  because 
they  are  remunerated  by  exchangeable  values,  and  because  their 
knowledge  has  been  acquired  at  the  price  of  such  values,  but 
not  because  they  are  producers  of  productive  power.*  In  his 
view,  they  are  nothing  but  accumulated  capital.  McCulloch 
goes  farther :  he  says  that  man  is  a  product  of  labor  as  much 
as  the  machine  which  he  produces,  and  it  seems  to  him  that  in 
all  economical  researches  man  must  be  regarded  in  this  point  of 
view.  Smith,  he  says,  assented  to  the  correctness  of  this  principle, 
but  omitted  to  draw  from  it  the  legitimate  conclusion.  One  of 
the  consequences  which  he  deduces  himself  is,  that  to  eat  and 
to  drink  are  productive  occupations.  Thomas  Cooper  values  a 
good  American  lawyer  at  three  thousand  dollars,  about  three 
times  as  much  as  an  able-bodied  slave. 

*  Say  expresses  this  opinion  in  many  places.  We  select  a  passage  from 
his  Economic  Politique  Pratique.  "  The  knowledge  of  a  Lawyer  or  a  Phy 
sician,  which  has  been  acquired  by  some  sacrifices,  and  which  produces  an 
income,  is  a  value  in  capital,  not  transmissible  it  is  true,  but  which  resides 
in  a  visible  body,  that  of  him  who  possesses  it. 


-  r     ,,. 

RODUCTIVE    FORCES    'A  N  J  s  •  221 


•  The  errors  and  contradictions  of  the  School,  to  which  I  have 
just  adverted,  can  be  readily  rectified  when  regarded  from  the 
point  of  productive  force.  Those  who  raise  pigs,  and  those  who 
manufacture  bag-pipes  or  pills,  are  indeed  pro^rfcTi^Klwit  the 
instructors  of  youth  and  of  manhood,  musicians,  v^tuo 
sicians,  judges,  and  statesmen,  are  productive  m' 
degree.  The  former  produce  exchangeable  val 
productive  power  ;  of  the  latter,  some  prepare  future  generations 
for  production  ;  others  develop  in  the  actual  generation  the 
moral  and  religious  sense  ;  others  apply  themselves  to  strengthen 
and  to  elevate  the  mind,  others  restore  the  productive  power  of 
the  sick  or  disabled  ;  others  act  as  legal  guardians  ;  others 
maintain  social  order  ;  finally,  others,  by  their  various  arts,  and 
by  the  enjoyment  they  afford,  encourage  and  stimulate  the  pro 
duction  of  exchangeable  values.  In  the  doctrine  of  values 
these  producers  of  productive  power  cannot  be  taken  into 
account,  except  so  far  as  their  services  are  remunerated  in  ex 
changeable  values  :  and  this  mode  of  considering  their  functions 
may  have  in  some  cases  its  practical  utility  ;  for  instance,  taxes 
must  be  paid  in  exchangeable  values  ;  but  when  the  inquiry 
concerns  international  relations,  or  the  entire  interests  of  a 
country,  this  point  of  view  is  deceptive,  and  leads  to  a  series  of 
mistakes,  and  to  a  train  of  narrow  ideas.* 

*  Much  has  been  said  upon  the  subject  of  productive  and  unproductive 
labor.  This  distinction  originated  with  the  physiocrats,  who,  not  under 
standing  that  production  consists  in  changing  the  form  or  the  place  of 
things  so  as  to  give  them  a  value  which  they  had  not  before,  and  not  of 
making  something  out  of  nothing,  decided,  very  gratuitously,  that  agricul 
tural  labor  was  the  only  productive  labor  ;  it  was  adopted  by  Adam  Smith, 
•who  extended  the  character  of  productive  to  all  labors  giving  value  to  the 
material  objects  on  which  they  are  exercised,  but  has  refused  it  to  all  others, 
without  overlooking,  however,  the  merit  of  these  others.  At  the  present 
time  this  distinction  is  unanimously  rejected,  and  it  is  admitted  that  every 
useful  labor  is  productive.  (See  upon  this  subject  particularly,  the  chapter 
upon  the  consumption  of  wealth  in  the  Principles  of  Political  Economy,  by 
McCulloch.) 

Nevertheless,  it  may  be  questioned  whether,  in  an  economical  point  of 
view,  every  useful  labor,  whatever  it  be,  ought  to  be  regarded  as  productive. 
The  solution  of  this  question  depends,  more  or  less,  on  the  extent  to  be 


222     f  /t^Tl^at 

The  property  of  a  nation  does  not  depend,  as  Say  thinks,  on* 
the  quantity  of  riches  and  of  exchangeable  values  it  possesses, 
but  upon  the  degree  in  which  the  productive  power  is  developed. 

given  to  the  domain  of  the  science.  Certain  minds,  and  Malthus  among 
them,  were  of  this  opinion,  thinking  that  the  proper  object  of  political 
economy  was  wealth,  material  wealth,  and  that  the  production  of  immate 
rial  things,  to  which  the  term  riches  has  been  applied  by  metaphor,  belongs 
to  another  order  of  studies  ;  they  remark  that  even  the  term  political  eco 
nomy  awakens  habitually  in  the  mind  the  idea  of  material  interests,  and 
that  those  authors  who  have  most  enlarged  the  horizon  of  the  science  have 
scarcely  treated  of  anything  else.  They  say  that,  in  an  economical  point 
of  view,  magistrates,  public  officers,  savants,  poets,  advocates,  physicians, 
in  fact  all  producers  of  those  moral  benefits  without  which  we  cannot  con 
ceive  of  civilization,  are,  properly  speaking,  only  indirect  producers.  In 
thus  naming  them,  they  do  not  wish  to  be  understood  as  undervaluing  their 
services,  which  are  frequently  not  only  superior  in  their  object  to  those  of 
direct  producers,  but  sometimes  concur  in  the  production  of  wealth,  even 
more  powerfully  than  the  rarest  efforts  of  industrial  genius :  they  endeavor 
only  to  describe  the  kind  of  concurrence  which  they  lend  to  material  pro 
duction. 

In  qualifying  indirect  producers  as  producers  of  productive  forces,  List 
places  himself  at  the  same  point  of  view :  it  may  be  that  he  succeeds  better 
in  exhibiting  their  social  and  economical  importance,  and  that  he  indicates 
better  the  relations  which  connect  the  material  with  the  moral  world.  — 
[H.  K.] 

The  fact  that  moral  considerations  are  expressly  excluded  from  the  science 
of  political  economy,  as  taught  by  the  School  of  Say,  explains  at  once  the 
cause  of  this  discussion  between  productive  and  unproductive  labor,  and 
many  other  like  distinctions  and  propositions  in  that  system.  How  a  science 
of  wealth  could  ever  have  been  constructed  apart  from  all  moral  considera 
tions,  that  is,  apart  from  whatever  may  concern  human  well-being,  and  that 
such  a  science  should  have  been  received  and  taught  in  the  public  institu 
tions  of  a  Christian  country,  will  one  day  be  regarded  as  the  chief  intellec 
tual  and  moral  phenomenon  of  our  age.  Wealth,  which  can  have  no  possi 
ble  value  or  importance,  except  as  a  means  of  human  welfare  or  pleasure, 
is  attempted  to  be  considered  apart  from  any  other  considerations  of 
humanity,  except  the  intellectual  or  physical  powers  which  concur  in  its 
production.  Then,  too,  the  abstract  powers  which  govern  the  distribution 
of  wealth,  are  demand  and  supply,  not  by  any  means  the  demand  which 
springs  strictly  from  the  actual  wants  of  a  whole  population,  nor  the  supply 
which  would  meet  those  wants,  but  the  demand  and  supply  of  trade,  free 
trade,  governed  as  they  are,  very  strictly,  by  merely  commercial  calculations 


PKODUCTIVE    FORCES    AND    VALUES.  223 

If  laws  and  institutions  do  not  produce  values  directly,  they 
produce  at  least  productive  power ;  and  Say  is  mistaken  when 
he  asserts  that  people  have  grown  rich  under  all  forms  of 
government,  and  that  laws  cannot  create  riches. 

The  external  trade  of  a  nation  must  not  be  appreciated  as 
that  of  a  merchant,  exclusively  according  to  the  theory  of 
values,  that  is  to  say,  upon  the  sole  consideration  of  the  material 
profits  of  the  moment :  the  nation  must  in  one  view  embrace  the 
whole  of  the  interests  on  which  its  existence  or  welfare,  its 
property,  its  power,  present  and  future,  depends. 

A  nation  ought  to  make  the  sacrifice  and  bear  the  privation 
of  material  riches,  to  acquire  intellectual  or  social  power;  it 
must  sacrifice  present  advantages  to  secure  future  benefits.  We 
think  it  has  been  historically  proved,  that  manufacturing  in 
dustry,  developed  in  all  its  branches,  is  the  characteristic  of  a 
high  degree  of  civilization,  material  prosperity,  and  political 
power ;  if  it  is  true,  as  we  believe  can  be  demonstrated,  that  in 
the  actual  state  of  the  world,  an  infant  industry,  deprived  of 

of  loss  and  gain, — of  buying  cheap  and  selling  dear.  That  the  constructors 
of  such  a  science  should  frequently  have  been  embarrassed  in  their  specu 
lations,  is  not  surprising.  Its  whole  success  is  due  to  the  logical  power  and 
clearness  with  which  it  was  developed  by  Say.  To  have  attained  clearness 
and  intelligibility  was  certainly  great  progress  upon  a  subject  before  then 
regarded  as  misty  above  all  others.  But  the  disciples  of  Say  have  lost 
ground  by  permitting  the  subject  to  be  opened  for  debate  upon  special 
topics ;  they  should  have  said,  it  is  finished,  and  shut  the  doors  against  all 
discussion.  This  would  have  saved  the  School  much  trouble,  but  could  not 
finally  have  saved  the  science.  For  there  remained  a  resource  to  the  oppo 
nents  of  this  System  which,  in  legal  language,  is  called  a  demurrer,  the 
effect  of  which  is  to  admit  all  statements  and  distinctions  in  their  detail, 
and  to  deny  their  effect  as  a  whole.  So,  whatever  may  be  said  of  the  parts 
and  parcels  of  Say's  System,  it  may  and  must  be  rejected  as  a  whole  ;  be 
cause  it  is  founded  on  a  separation  of  things  which  are,  in  their  nature, 
inseparable.  Wealth  and  trade  can  never,  in  a  truly  philosophical  or 
scientific  system  of  political  or  social  economy,  be  separated  from  men  and 
morals,  and  human  well-being.  It  must  be,  and  should  be,  impossible  to 
decide  rightly,  innumerable  questions  which  arise  in  the  production  and 
distribution  of  wealth,  without  invoking  considerations  of  morality  and 
humanity,  if  not  of  patriotism  and  religion.  —  [S.  C.] 


224  THEOKY. 

protection,  is  not  able  to  sustain  the  competition  of  an  industry 
long  established,  of  an  industry  protected  upon  its  own  terri 
tory  ;  how,  with  arguments  borrowed  from  the  theory  of  values, 
can  any  one  undertake  to  prove  that  a  nation,  like  an  individual, 
must  buy  the  goods  it  wants  in  the  cheapest  market ;  that  they 
must  be  insane  who  manufacture  what  can  be  purchased  else 
where  at  a  lower  price ;  that  the  industry  of  a  country  must  be 
left  to  the  unaided  and  unsupported  intelligence  and  enterprise 
of  private  individuals,  that  protecting  duties  are  monopolies 
granted  to  manufacturers  at  the  expense  of  the  people  at  large  ? 

It  is  true  that  protective  duties  enhance  at  first  the  price  of 
J  manufactured  products ;  but  it  is  equally  true,  as  is  admitted  by 
the  School  itself,  that  in  course  of  time,  in  a  nation  capable  of 
large  industrial  development,  such  articles  can  be  produced  at  a 
cheaper  rate  than  they  can  be  imported  from  abroad.  If  then, 
protecting  duties  at  first  involve  some  sacrifice  of  values,  this 
sacrifice  is  amply  compensated  by  the  acquisition  of  a  productive 
power,  which  ensures  not  only  a  larger  product  of  wealth  in 
i  future,  but  also  a  greater  industrial  independence  in  case  of  war 
or  adverse  commercial  regulations.  With  industrial  indepen 
dence  and  the  prosperity  which  flows  from  it,  a  nation  acquires 
the  means  of  carrying  on  external  trade  and  of  extending  its 
navigation ;  it  elevates  its  civilization,  improves  its  institutions 
at  home,  and  increases  its  power  abroad. 

A  nation  which  has  a  vocation  for  manufacturing,  pursues,  in 
resorting  to  protective  duties,  the  same  policy  as  the  individual 
who  builds  a  factory,  or  plants  an  orchard,  or  prepares  a  farm 
that  his  children  may  reap  the  benefit  and  have  their  living  from 
that  which  is  in  the  first  instance  a  sacrifice  on  the  part  of  the 
kind  parent. 

The  opinion  of  J.  B.  Say  upon  premiums  given  for  the  pur 
pose  of  encouraging  the  export  trade,  shows  how  far  the  School 
has  been  misled  in  appreciating,  by  the  theory  of  values,  rela 
tions  which  must  be  chiefly  regarded  and  considered  under  the 
light  of  the  theory  of  productive  power  ;  he  maintains  that  such 
premiums  are  gifts  made  by  the  country  from  which  the  goods 
are  exported  to  the  country  by  which  the  goods  are  imported. 


PRODUCTIVE  FORCES  AND  VALUES.     225 

Suppose  then  that  France  considers  a  duty  of  twenty-five  per 
cent,  adequate  to  protect  her  manufactures,  still  in  their  infancy, 
but  that  England  allows  premiums  of  export  equal  to  thirty  per 
cent.,  what  would  be  the  effect  of  such  a  gift  to  France  ?  For 
a  few  years  French  consumers  might  purchase  at  a  cheaper  rate 
than  formerly  the  manufactured  articles  which  they  required, 
but  the  French  manufacturers  would  be  ruined,  millions  of  men 
would  be  reduced  to  beggary  or  be  compelled  either  to  emigrate 
or  devote  themselves  to  agriculture.  In  the  most  favorable 
hypothesis  the  consumers  dependent  hitherto  on  French  farmers 
would  become  their  competitors,  agricultural  production  would 
increase  at  the  very  time  when  consumption  was  diminishing. 
Hence  an  inevitable  depreciation  of  agricultural  products  and 
property  in  France,  the  country  itself  becoming  more  feeble 
and  impoverished  in  proportion.  England's  gift  in  value  would 
be  dearly  paid  for  in  productive  power ;  it  would  be  equivalent 
to  the  gift  which  the  Sultan  makes  to  his  Pashas  when  he  sends 
them  a  silken  cord  with  which  to  hang  themselves. 

Since  the  time  when  the  Trojans  received  the  present  of  a 
wooden  horse  from  the  Greeks,  it  should  be  deemed  a  delicate 
affair  for  one  nation  to  receive  presents  from  another.  England 
has  presented  the  continent  with  gifts  of  enormous  value,  under 
the  form  of  subsidies ;  the  continental  nations  have  paid  dearly 
for  them,  in  the  loss  of  power.  These  subsidies  have  operated  as 
premiums  of  export  in  favor  of  English  manufactures,  to  the 
detriment  of  German  manufactures.  If  England  were  willing 
to  supply  Germany  gratuitously  for  several  years  with  all  the 
manufactured  articles  the  people  need,  we  should  not  advise  the 
acceptance  of  such  an  offer.  Suppose  that  England  has  become 
able  by  new  inventions  to  manufacture  linen  forty  per  cent, 
cheaper  than  Germany  by  the  old  process,  and  that  she  is  in 
advance  of  Germany  several  years  in  these  new  processes ;  one 
of  the  most  important  and  the  most  ancient  branches  of  industry 
in  that  country  would  be  ruined  for  want  of  a  protective  duty ;  it 
would  be  just  as  if  Germany  had  lost  one  of  her  members.  But 
who  would  console  himself  for  the  loss  of  an  arm,  by  the  fact 
that  he  could  purchase  his  shirt  forty  per  cent,  cheaper  ? 
15 


226  THEORY. 

The  English  often  appear  in  the  attitude  of  making  gifts  to 
foreigners ;  the  mode  varies,  and  it  even  happens  not  unfre- 
quently  that  they  are  unwillingly  generous ;  those  for  whom 
these  bounties  are  intended,  ought,  however,  to  ask  themselves 
whether  they  are  likely  to  be  safe  or  advantageous.  Possessing 
the  manufacturing  and  commercial  monopoly  of  the  world,  their 
manufactures  are  often  in  the  condition  which  is  designated  by 
the  term  glut,  the  result  of  over-production  or  over-trading.  This 
surplus,  so  injurious  to  the  home  market,  is  promptly  committed 
to  the  holds  of  steamers  for  foreign  shores ;  in  a  week,  these 
goods  reach  Hamburg,  Berlin,  and  Frankfort ;  in  two  weeks, 
they  are  at  New  York,  offered  to  foreign  consumers  at  perhaps 
fifty  per  cent,  below  their  value.  English  manufacturers  suffer 
by  this  temporarily,  but  their  productive  power  is  saved,  and 
they  find  opportunities  of  indemnifying  themselves  afterwards 
by  better  prices.  German  and  American  manufacturers  suffer 
by  the  faults  or  are  ruined  for  the  benefit  of  those  of  England. 
English  people  see  the  flash,  hear  the  report,  but  the  explosion 
and  the  disaster  are  elsewhere,  and  when  those  upon  whom  the 
evil  has  fallen  complain  of  their  injuries,  the  mischief  is  declared 
by  merchants  to  have  been  caused  by  a  conjuncture  or  revulsion 
of  trade.  When  we  recall  to  mind  how  often  by  such  conjunc* 
tures  the  entire  interest  of  manufacturing  industry,  the  credit 
system,  agriculture  itself,  in  a  word,  the  whole  economy  of 
nations  admitting  free  competition  with  England,  has  been 
disturbed  and  shaken  to  its  foundations;  when  we  recollect 
that  afterwards  these  same  nations  have  largely  remunerated  the 
English  manufacturers  by  paying  them  higher  prices,  may  we 
not  doubt  whether  this  theory  of  values  and  these  cosmopolite 
maxims  should  serve  as  rules  for  international  commerce  ?  The 
School  has  not  deemed  it  expedient  to  explain  the  causes  and 
the  effects  of  these  crises  or  commercial  conjunctures. 

The  great  statesmen  of  modern  times  have  almost  without 
exception  comprehended  the  vast  influence  of  manufactures  upon 
the  wealth,  civilization,  and  power  of  nations,  and  the  necessity 
of  protecting  them ;  Edward  III.  and  Elizabeth,  Frederick  the 
Great,  and  Joseph  II.,  Washington  and  Napoleon.  Without 


PRODUCTIVE    FORCES    AND    VALUES.  227 

sounding  the  depths  of  theory,  their  intelligent  glance  revealed 
to  them  the  importance  of  manufacturing  industry;  and  they 
decided  wisely.  It  was  reserved  for  the  physiocrats,  astray  in 
their  premises  and  reasoning,  to  arrive  at  a  different  conclusion. 
The  fantastic  edifice  of  that  School  has  vanished ;  the  present 
School  supplanted  its  predecessor  without  escaping,  however, 
its  fundamental  errors,  deviating,  in  fact,  but  slightly  from  its 
mistaken  doctrines.  Having  made  no  distinction  between  pro 
ductive  power  and  exchangeable  value,  and  having  made  the 
former  subordinate  to  the  latter  instead  of  studying  them  sepa 
rately,  it  could  not  understand  the  difference  between  agricultu- 
i;al  productive  power  and  manufacturing  productive  power.  It 
failed  to  discover  that  manufacturing  industry  on  being  estab 
lished  in  an  agricultural  country  employs  and  makes  available  a 
mass  of  the  power  of  mind  and  of  body,  of  natural  and  mechani 
cal  forces,  or  Capital,  in  the  terminology  of  the  School,  hitherto 
inactive,  and  which  without  that  industry,  would  never  have 
been  productive.  The  School  imagines  that  the  introduction  of 
manufacturing  industry  is  an  abstraction  of  power  from  agricul 
ture  to  give  it  to  manufactures,  whilst,  in  fact,  a  power  almost 
entirely  new  has  been  created,  a  power  which,  very  far  from 
having  been  acquired  at  the  expense  of  agriculture,  becomes  its 
chief  support  and  promotes  its  highest  success.* 

*  Although  commerce  or  international  free  trade  is  the  great  balance- 
wheel  of  the  system  of  the  School  of  Say,  yet  both  he  and  his  disciples 
have  shown  themselves  extremely  deficient  in  commercial  knowledge.  They 
appear  to  think  there  is  a  regularity  in  the  movements  of  foreign  trade  like 
that  in  a  well-regulated  counting-house,  which  is  controlled  by  the  power 
of  one  man.  There  is  scarcely  any  human  business  more  variable  than 
foreign  trade.  It  fluctuates  with  the  weather,  with  the  state  of  the  crops, 
with  the  spirit  of  speculation,  with  commercial  revulsions,  happen  where 
they  may ;  prices,  supply  and  demand,  all  fluctuate  from  causes  innumera 
ble,  and  often  unappreciable.  Yet  by  this  School  the  industry  of  every 
country,  the  welfare  and  the  daily  bread  of  the  masses  in  every  country 
are  made  subject  to  all  the  chances  and  changes  of  foreign  trade,  which  is 
as  uncertain  as  the  winds  and  waves,  and  under  little  more  control  of  one 
nation  or  many. 

It  is  not  the  quantity  of  goods  which  a  nation  can  manufacture,  nor  the 
quantity  it  exports,  that  is  of  the  most  concern  to  it,  but  the  quantity  which 


228  THEORY. 


CHAPTER  III. 

NATIONAL  DIVISION  OF  LABOR,  AND  THE  ASSOCIATION  OF 
THE  PRODUCTIVE  FORCES  OF  A  COUNTRY. 

THE  School  is  indebted  to  its  illustrious  founder  for  the  dis 
covery  of  that  natural  law,  which  it  calls  the  "division  of  labor," 
but  neither  Adam  Smith,  nor  any  of  his  successors,  have  per 
ceived  the  full  scope  of  that  law,  nor  pursued  it  to  its  most 
important  consequences. 

the  people  of  the  country  can  afford  to  consume,  that  is  the  real  index  of 
•wealth  and  prosperity.  A  nation  may  manufacture  and  export  on  an  im 
mense  scale,  and  be  growing  poorer  every  year.  It  is  of  much  more  con 
sequence  that  the  industry  of  a  country  should  contribute  largely  and  fully 
to  the  necessary  comforts  and  luxuries  of  life  of  the  whole  people,  than 
that  the  few,  very  few  men  engaged  in  foreign  trade,  should  make  large 
profits,  even  if  to  these  few  merchants  be  added  a  few  manufacturers  who 
employ  large  numbers  of  laborers.  A  nation  may  manufacture  cheap  goods 
for  the  world,  and  the  whole  burden  of  this  cheapness,  and  the  risks  of 
selling  on  credit  in  all  markets,  may  be  saddled  upon  the  working  popula 
tion  ;  and  such  is  the  tendency  of  free  trade,  because  every  effort  is  to  in 
crease  trade,  and  not  to  promote  specially  the  well-being  of  the  people  who 
live  by  their  labor.  It  is  coolly  assumed  that,  if  trade  and  merchants  pros 
per,  all  must  go  right  with  the  population. 

It  is  assumed  too,  in  the  face  of  facts,  that  cheap  goods  must  be  an  im 
mense  advantage  to  a  people,  overlooking  the-  more  important  consideration, 
the  ability  of  the  people  to  purchase.  If  cheap  goods  must  be  paid  for  in 
money  which  people  have  not,  and  dear  goods  can  be  purchased  with  pro 
ducts  of  their  farms  and  shops  which  they  have,  then  they  cannot  purchase 
the  cheap  goods  at  all,  but  can  supply  themselves  bountifully  with  the  dear 
goods.  If  two  merchants  commence  retailing  goods  in  a  country  town,  and 
one  sells  cheap  for  money,  and  the  other  adds  twenty  or  even  fifty  per  cent, 
more  to  his  prices,  but  receives  in  payment  every  kind  of  country  product, 
for  which  the  people  otherwise  have  individually  no  market,  but  for  which 
the  merchant  could  find  consumers  among  the  manufacturers  from  whom 
he  purchased  his  goods,  the  cheaper  goods  would  remain  unsold,  while 
the  dear  goods  would  be  on  the  backs  and  in  the  houses  of  the  consumers. 
This  illustrates,  in  part,  the  difference  between  domestic  and  foreign  trade. 
The  latter  is  limited  by  the  quantity  and  kind  of  products  which  foreigners 
take  from  us ;  the  former  has  no  limit  but  the  wants  and  powers  of  produc- 


LABOR  AND  PRODUCTIVE  FORCES.      229 

The  very  expression,  "division  of  labor,"  is  inadequate,  and 
necessarily  gives  a  false,  or  at  least  an  incomplete,  idea. 

There  is  a  division  of  labor  when,  in  the  same  day,  a  savage 
hunts,  fishes,  cuts  wood,  repairs  his  hut,  makes  arrows,  nets  and 
clothing.  But  the^re  is  also  a  division  of  labor  in  the  case  quoted 
by  Adam  Smith,  when  ten  persons  divide  among  themselves  the 
various  operations  necessary  to  the  manufacture  of  a  pin. 
The  former  is  an  objective  division,  the  latter  a  subjective 
division ;  the  latter  is  favorable  to  production,  the  former  pre 
judicial.  The  essential  difference  between  them  is,  that  in  the 
one  case  a  single  person  divides  his  labor  to  produce  different 
objects,  and  in  the  other  several  persons  divide  among  them 
selves,  or  unite  in,  the  production  of  a  single  object.  The  two 
facts  might  just  as  well  be  designated  by  the  term,  association 
of  labor ;  the  savage  unites  in  his  person  different  labors,  and 

! 

tion  of  those  who  carry  it  on.  There  are  a  vast  number  of  agricultural 
products  so  bulky  as  to  be  wholly  precluded  from  the  list  of  goods  that  can 
be  exported,  and  which  every  nation  must  produce  for  themselves.  These, 
however,  are  indispensable  articles  of  consumption,  and  their  production  is 
indispensable  to  good  farming.  Where  these  valuable  products  find  a 
market  at  home,  as  they  do  in  a  manufacturing  country,  and  the  vicinity 
of  cities,  lands  quadruple  their  value,  farmers  grow  rich,  and  the  people  are 
comfortable.  The  prices  at  which  such  exchanges  are  made  are  of  less 
importance  than  the  fact  that  the  people  are  supplied.  The  result  is,  that 
potatoes,  turnips,  parsnips,  beets,  cabbage,  fruit,  poultry,  veal,  mutton, 
cheese,  and  butter,  are  transformed  by  home-industry  and  home-trade,  into 
iron,  steel,  hardware,  linen,  cotton,  woollen,  and  silk  goods,  into  every 
article  of  wearing  apparel,  into  every  luxury  and  comfort  which  can  be 
brought  within  the  reach  of  a  whole  population. 

It  is  not  cheap  goods  merely  which  a  government  must  aim  to  bring  to 
its  people,  but  enough  goods  :  it  is  not  the  low  price,  but  the  ample  supply, 
that  proves  the  wisdom  of  public  policy. 

Cheapness  will  always  be  the  individual  rule,  for  the  individual  can 
change  his  policy  according  to  the  circumstances  or  humor  of  the  hour ; 
but  the  nation  must  pursue  a  more  steady  and  safe  policy  for  its  millions. 
If  all  the  nations  were  to  betake  themselves  to  Great  Britain  for  cotton 
goods,  and  linen  goods,  for  iron,  and  steel,  and  hardware,  and  other  things 
produced  cheaper  there  than  elsewhere,  then  all  these  cheap  articles  would 
become  dear,  and  remain  dear  as  long  as  the  dependence  upon  that  market 
continued.  —  [S.  C.] 


230  THEORY. 

in  the  fabrication  of  a  pin  several  persons  unite  their  labor 
upon  one  object. 

That  natural  law,  by  means  of  which  the  School  explains  these 
important  phenomena  in  the  economy  of  society,  does  not  evi 
dently  consist  in  a  simple  division  of  labor;  it  is  a  division 
among  several  individuals  of  diverse  operations  in  a  certain 
industry ;  it  is  at  the  same  time,  a  combination  or  an  associa 
tion  of  enterprise,  intelligence,  and  diverse  forces,  in  view  of  a 
common  production.  The  productive  power  of  these  operations 
belongs  not  merely  to  division,  it  essentially  depends  upon 
association.  Adam  Smith  himself  understood  this;  he  says, 
that  the  objects  necessary  to  the  life  of  the  most  humble  member 
of  society  are  the  product  of  joint  labor,  and  the  co-operation  of  a 
multitude  of  individuals.*  It  is  to  be  regretted  that  he  did  not 
pursue  this  idea  of  joint  labor,  so  clearly  announced. 

We  pause  upon  this  example  of  a  pin  manufactory,  pro 
posed  by  Adam  Smith,  as  an  explanation  of  the  advantages 
of  division  of  labor ;  and  if  we  investigate  the  causes  of  the  fact, 
that  ten  persons  produce  many  more  pins  united  in  one 

*  The  idea  of  the  concurrence  or  co-operation  of  various  forces,  is  doubt 
less  implied  in  the  law  discovered  by  Adam  Smith  ;  and  McCulloch,  among 
other  economists,  puts  the  proposition  in  this  shape :  "  division  and  combi 
nation  of  employment."  But  it  cannot  be  disputed  that  List  has  the  merit 
of  having  disentangled  the  subject,  and  of  having  presented  it  with  more 
clearness  and  intelligence,  and  with  richer  developments. 

J.  Stuart  Mill,  in  his  excellent  Principles  of  Political  Economy,  uses  the 
•words  co-operation  or  combination  of  labor ;  he  attributes  to  his  fellow- 
countryman,  Wakefield,  the  honor  of  having  first  shown,  in  a  note  to  an 
edition  of  Adam  Smith,  that  co-operation  is  a  more  important  principle  than 
division,  and  of  having  distinguished  two  kinds  of  co-operation,  simple  and 
complex,  according  as  many  persons  unite  in  the  same  labor,  or  in  many 
different  labors.  This  distinction  was  made  at  the  same  time  by  different 
persons  in  England  and  Germany. 

The  effects  of  a  good  national  division  of  labor,  or  of  the  harmony  of  the 
productive  forces  within  a  nation,  have  never  before  been  sketched  as  they 
are  in  this  beautiful  chapter  of  List.  As  to  the  division  of  labor  through 
out  the  world,  that  has  been  better  studied,  because  on  it  has  been  founded 
one  of  the  chief  arguments  for  free  trade.  List  appears  to  me,  however,  to 
place  it  in  a  clearer  light  than  has  ever  been  shed  on  it  before.  —  [H.  R.] 


LABOR    AND    PRODUCTIVE    FORCES.  231 

manufacture,  than  if  each  one  worked  separately,  we  shall  find 
that  a  division  of  the  operations,  without  the  association  of  pro 
ductive  powers  for  a  common  end,  would  be  very  little  help  in 
the  production.  That  a  favorable  result  may  be  obtained,  it  is 
necessary  that  the  different  individuals  be  united  and  co-operate 
in  the  work  intellectually  and  bodily.  He  who  makes  the  heads 
of  pins  must  count  upon  the  labors  of  him  who  makes  the 
points,  so  that  he  may  not  lose  his  labor  by  manufacturing  heads 
which  would  be  useless.  A  suitable  proportion  ought  to  be  pre 
served  in  the  different  branches ;  the  workmen  ought  to  be 
arranged  in  proper  proximity  to  secure  the  utmost  advantage 
from  their  co-operation,  and  this  arrangement  should  be  secured 
to  the  laborers.  Suppose,  for  instance,  that  each  one  of  ten 
workmen  lived  in  a  different  country;  how  often  would  their 
co-operation  be  interrupted,  by  wars,  by  difficulty  of  transporta 
tion,  commercial  revulsions,  etc.  ?  How  much  would  the  product, 
thus  enhanced  in  price,  and  by  consequence  the  benefit  of  the 
division  of  operations,  be  diminished?  Would  not  the  with 
drawal  of  a  single  workman  from  the  association  bring  to  a  stop 
the  labor  of  all  the  rest  ? 

By  designating  the  division  of  operations  as  the  essential 
characteristic  of  this  natural  law,  the  School  has  erred  in  con 
fining  it  to  a  manufacture,  or  to  the  working  of  a  farm ;  it 
should  have  perceived  that  the  same  law  extends  over  the  whole 
of  manufacturing  and  agricultural  industry,  and  generally  over 
the  whole  economy  of  a  nation. 

As  the  manufacture  of  pins  can  prosper  only  by  the  com 
bination  of  the  productive  power  of  individuals,  every  manu 
facture,  of  whatever  kind,*,  can  flourish  only  by  the  combination 

*  The  manufacture  of  machinery  furnishes  in  aid  of  this  idea  a  very 
striking  illustration.  The  construction  of  machines  can  never  attain  a 
high  degree  of  perfection,  where  one  shop  is  obliged  to  manufacture  a  great 
variety  of  machines.  To  attain  excellence,  each  establishment  should 
apply  itself  to  the  construction  of  a  small  number  of  kindred  machines  or 
instruments,  that  these  may  be  made  at  as  low  a  price  and  as  perfect  as 
possible ;  for  instance,  one  may  manufacture  machinery  for  cotton  and 
woollen  factories ;  another  may  make  steam-engines,  &c.  For  only  in  this 
way  can  the  constructor  afford  to  provide  himself  with  such  perfect  tools 


232  THEORY. 

of  its  productive  power  with  those  of  all  other  manufactures. 
To  make  a  manufactory  of  machinery  prosperous,  it  is  neces 
sary  that  mines  and  metallic  works  furnish  the  material  which 
it  uses,  and  that  hundreds  of  manufactories  employ  or  use  the 
machinery  it  manufactures.  Without  shops  for  the  construction 
of  machines,  a  nation  in  time  of  war  would  be  in  danger  of  losing 
the  greatest  part  of  its  manufacturing  power.  Manufacturing 
industry  and  agriculture,  being  regarded  as  a  whole,  prosper  in 
the  proportion  of  their  proximity,  and  in  proportion  as  they  are 
loss  disturbed  in  the  reciprocal  influence  which  they  exercise 
upon  each  other.  The  advantages  of  their  association  under 
one  political  authority  are,  in  case  of  war,  of  national  quarrels, 
bad  crops,  etc.,  not  less  striking  than  those  of  the  union  under 
one  roof  of  workmen  employed  in  a  pin  manufactory. 

Smith  maintains  that  the  division  of  labor  is  less  applicable 
to  agriculture  than  to  manufacturing  industry :  he  has,  however, 
in  his  view,  but  one  manufactory,  or  but  a  single  farm.  He 
failed  to  extend  his  principle  to  entire  districts  or  to  whole 
provinces.  In  no  place  has  the  division  of  labor  and  the  com 
bination  of  productive  power  more  influence  than  when  each 
region,  each  province,  is  able  to  devote  itself  exclusively,  or  at 
least  chiefly,  to  any  special  branch  of  agricultural  production 
for  which  it  is  particularly  fitted  by  nature.  In  one  place, 
wheat  and  hops  succeed  specially ;  in  another,  wine  and  fruit ; 

and  apparatus  as  will  enable  him  to  turn  off  good  and  cheap  machines  with 
the  latest  improvements,  and  employ  at  moderate  wages  the  most  skilful 
workmen  and  the  best  artists.  The  want  of  this  division  of  labor  explains 
why,  in  Germany,  the  machine-shops  have  not  attained  the  perfection  of 
those  of  England.  But  the  reason  why  this  division  of  labor  is  not  yet 
established  in  Germany,  is  because  the  different  kinds  of  spinning  which 
would  create  a  demand  for  the  various  machines  are  not  yet  introduced  there. 
The  importation  of  cotton-yarn,  then,  prevents  the  manufacture  of  machi 
nery  for  spinning  cotton— it  stops  the  manufactory  of  factories. 

The  division  of  labor  is  not  less  important  in  other  branches  of  manufac 
turing  industry.  Spinning,  weaving,  and  printing  upon  cotton,  woollen,  or 
silk  goods,  for  instance,  cannot  attain  a  high  degree  of  perfection,  and  at 
cheap  rates,  except  where  the  demand  is  sufficient  to  enable  every  manu 
factory  to  confine  itself  exclusively  to  the  production  of  one  kind  of  thread, 
cloths,  or  prints. 


LABOE    AND    PRODUCTIVE    FORCES.  233 

in  another,  timber  and  pasturage  for  cattle.  If  each  region 
pursues  the  same  course  of  cultivation  at  the  same  time,  it  is 
evident  that  both  labor  and  soil  must  be  much  less  productive 
than  if  each  make  its  chief  crop  that  for  which  it  is  best  suited 
by  nature,  exchanging  severally  the  surplus  of  their  special 
production  for  the  surplus  of  others  having  like  natural  advan 
tages  for  the  production  of  food  or  some  special  raw  material. 
This  division  of  labor,  this  combination  of  the  productive  power 
employed  in  agriculture,  can  only  be  realized  in  a  country  which 
has  reached  a  high  degree  of  development  in  all  branches  of 
industry,  for  there  only  can  a  strong  demand  exist  for  the  very 
various  products  of  agriculture ;  there  only  can  a  demand  for 
the  surplus  products  of  agriculture  be  so  certain  and  so  con 
siderable  as  to  ensure  the  producer  a  market  at  a  suitable  price 
during  the  year,  or  at  least,  during  the  following  year,  for  the  whole 
surplus  of  his  production ;  in  such  a  country  only  can  sufficient 
capital  be  devoted  to  dealing  in  and  providing  proper  storage 
for  the  products  of  the  soil,  such  improved  means  of  transporta 
tion,  canals,  railroads,  lines  of  steamers,  well-kept  highways  as 
are  indispensable  for  the  conveyance  of  agricultural  and  other 
bulky  products.  It  is  solely  by  the  aid  of  a  good  system  of 
communications  that  provinces  near,  as  well  as  remote,  can 
eifect  an  exchange  of  the  surplus  of  their  respective  produc 
tions.  When  each  province  produces  all  it  consumes,  there  are 
few  occasions  of  exchange,  and  consequently  no  want  of  expen 
sive  communications. 

Let  it  be  noted  that  the  increase  of  productive  power  conse 
quent  upon  division  of  labor,  and  upon  the  combination  of  indi 
vidual  power,  begins  in  the  private  manufactory,  and  extends, 
finally,  even  to  national  associations ;  manufacturing  industry 
prospers  in  proportion  as  its  labor  is  more  divided,  as  its  laborers 
are  more  closely  united,  and  as  the  co-operation  of  the  whole  is 
better  secured.  The  productive  power  of  each  manufactory  is 
greater  in  proportion  as  the  whole  manufacturing  industry  of 
the  country  is  more  developed  in  its  ramifications,  and  as  it  is 
itself  more  strictly  connected  with  the  other  branches  of  manu 
facture.  Agricultural  power  is  productive  likewise  in  proportion 


234  THEORY. 

as  agriculture  is  more  strictly  united  by  relations  at  once  local, 
commercial,  and  political,  with  a  manufacturing  industry  com 
plete  in  its  various  branches.  In  proportion  as  general  industry 
is  developed,  the  separation  of  the  labor  of  agriculture,  and  the 
combination  of  its  productive  powers,  take  the  proper  form  and 
arrangement,  and  by  these  advantages  it  is  carried  to  its 
highest  degree  of  perfection.  The  richest  nation  being  that 
u/which  possesses  the  greatest  productive  power,  will  be  of  course 
that  which,  upon  its  own  territory,  has  carried  its  manufactures 
of  every  kind  to  the  highest  degree  of  productiveness,  and  the 
agriculture  of  which  furnishes  its  population  of  manufacturers 
with  the  chief  part  of  the  food  and  raw  materials  requisite  for 
their  wants  and  business. 

Let  us  now  change  the  argument.  A  nation  pursuing  only 
agriculture  and  a  few  of  the  more  necessary  mechanical  arts,  is 
without  the  first  and  principal  division  of  labor  among  its  citi 
zens,  and  loses  the  most  important  half  of  its  productive  power ; 
it  even  wants  that  division  of  labor  which  is  so  needful  in  the 
operations  of  special  branches  of  agriculture.  A  nation  with 
an  industry  so  incomplete  is  less  productive  by  half,  than 
one  of  well-arranged  industry ;  with  a  territory  of  equal  extent, 
or  of  even  much  greater  extent,  with  an  equal,  or  even  greater, 
population,  its  productive  power  will  yield  perhaps  scarcely  a 
fifth,  or  even  a  tenth  part  of  the  material  wealth  which  a  country 
of  well-adjusted  industry  can  produce,  and  that  for  the  same 
reason  that  in  a  complicated  manufacture  ten  persons  can  pro 
duce  not  only  ten  times  more,  but  perhaps  thirty  times  more 
than  one  alone,  just  as  the  labor  of  a  man  who  has  but  one  arm 
will  not  merely  be  one-half  less,  but  perhaps  an  hundred-fold 
less  than  that  of  the  man  who  has  two  arms. 

This  loss  of  productive  power  must  be  the  more  sensibly  felt 
as  machinery  is  better  adapted  to  aid  manufacturing  labor,  and 
less  applicable  to  agricultural  labor.  A  part  of  the  productive 
power  thus  lost  by  an  agricultural  people  will  go  to  the  profit 
of  the  nation  from  which  they  derive  manufactured  articles  in 
exchange  for  their  crude  products.  Beyond  this,  however,  there 
will  be  no  further  loss  until  the  agricultural  nation  shall  have 


LABOR    AND    PRODUCTIVE    FORCES.  235 

reached  that  degree  of  civilization  and  political  development  ^ 
necessary  for  the  establishment  of  manufacturing  industry.  If 
it  has  not  yet  reached  that  degree,  if  it  is  still  in  a  state  of 
barbarism,  or  semi-civilization,  if  its  rural  economy  has  not 
advanced  beyond  its  primitive  simplicity,  the  importation  of 
articles  of  foreign  manufacture,  and  the.  exportation  of  its 
crude  products,  cannot  but  sensibly  increase  each  year  its  pros 
perity,  as  well  as  awaken  and  increase  its  intellectual  and  social 
power.  If  that  commerce  is  not  interrupted  either  by  foreign 
prohibition  of  raw  materials  or  by  war ;  or  if  the  territory  of 
this  merely  agricultural  country  is  situated  in  the  torrid  zone, 
the  advantage  will  be  equal  and  considerable  on  both  sides,  and 
that  according  to  the  nature  of  things ;  for  under  the  influence 
of  such  exchange  such  a  nation  may  make  greater  advances 
and  with  greater  security,  than  if  entirely  left  to  itself.  But 
when  an  agricultural  nation  has  reached  the  highest  point  of  its 
rural  development,  that  is,  as  far  as  the  aid  of  foreign  trade  can 
carry  it,  or  if  manufacturing  nations  decline  receiving  the 
productions  of  its  soil,  in  payment  for  manufactured  articles, 
or  if  the  active  competition  of  manufacturing  people  in  the 
markets  of  an  agricultural  nation,  should  prove  an  obstacle  to 
the  growth  of  manufactures,  then  the  agriculture  of  the  latter  is 
exposed  to  the  risk  of  being  seriously  checked. 

We  regard  agriculture  as  seriously  checked,  when,  for  want 
of  manufacturing  consumers,  or  a  home  market,  all  the  surplus 
of  the  growing  population  is  devoted  to  agriculture,  consuming 
the  whole  agricultural  product,  emigrating  at  the  age  of  man 
hood,  or  dividing  the  land  among  the  existing  cultivators  until 
the  share  of  each  family  becomes  so  small  as  scarcely  to  yield 
sustenance  for  the  occupants,  let  alone  any  surplus  for  foreign 
trade.  Under  a  well-devised  development  of  productive  forces, 
the  largest  portion  of  the  increase  of  the  population,  as  soon  as 
they  reach  a  certain  degree  of  culture,  betake  themselves  to  the 
manufactories;  the  surplus  of  agricultural  production  goes,  on 
the  on«  hand,  to  supply  the  manufacturing  population  with  food 
and  raw  materials,  and  on  the  other,  enables  the  agriculturists 
not  only  to  buy  manufactured  products,  but  the  machines  and 


236  THEORY. 

implements  which  improved  farming  and  the  increased  demand 
for  its  products  requires. 

If  these  relations  are  established  at  the  right  time,  the  produc 
tive  forces,  agricultural  and  manufacturing,  aid  each  other,  and 
permit  an  indefinite  increase.  The  demand  for  agricultural  pro 
ducts  on  the  part  of  the  manufacturing  population  will  become 
very  great,  but  agriculture  will  only  employ  so  many  laborers  and 
the  soil  will  only  be  subdivided  so  far  as  may  be  necessary  to 
obtain  the  largest  possible  product.  The  surplus  of  this  pro 
duction  will  be  the  measure  of  the  ability  of  the  cultivators  to 
consume  the  goods  of  the  manufacturer.  A  progressive  increase 
of  this  surplus  will  increase  the  demand  for  manufacturing  labor. 
The  agricultural  population  will  continue  to  find  vent  for  its 
increase  in  the  manufactories,  and  the  population  of  the  manu 
factories  will  finally  equal,  if  not  surpass  that  of  the  fields.  Such 
is  the  case  in  England ;  the  contrary  has  occurred  in  a  part  of 
France  and  Germany.  It  was  chiefly  the  rearing  of  sheep  and 
the  manufacture  of  woollens,  entered  into  by  England  on  a  large 
scale  long  before  other  countries,  which  conducted  that  people 
to  the  natural  division  of  labor  between  the  various  branches 
of  industry.  In  other  countries,  agriculture  had  been  checked 
chiefly  under  the  influence  of  the  feudal  system  and  the  law  of 
the  strongest.  Property  in  the  soil  gave  consideration  and 
power  only  so  far  as  it  served  for  the  support  of  a  certain  num 
ber  of  vassals,  whom  the  feudal  chief  employed  in  his  quarrels. 
The  more  vassals  he  had,  the  more  soldiers.  In  that  barbarous 
period,  the  proprietor  could  not  consume  his  rents  otherwise  than 
by  maintaining  a  large  number  of  servants ;  he  could  not  pay 
them  or  attach  them  more  to  his  person  than  by  giving  them 
land  to  cultivate  under  the  condition  of  a  personal  service,  and 
of  a  small  rent  in  kind.  Thus  an  exaggerated  division  of  the 
soil  was  artificially  produced ;  and  when,  in  our  time,  the  public 
authority  endeavors  to  restrain  this  subdivision  by  means  equally 
artificial,  it  merely  attempts  to  re-establish  the  natural  order 
of  things. 

To  arrest  the  injury  to  agriculture  of  a  nation,  arising  from 
the  vicious  institutions  of  olden  time,  the  best  method,  inde- 


LABOR    AND    PRODUCTIVE    FORCES.  237 

pendently  of  the  encouragement  given  to  emigration,  is  the 
establishment  of  manufacturing  industry.  Then,  by  degrees, 
the  increase  of  population  will  be  absorbed  by  the  manufactories, 
and  an  increased  demand  for  agricultural  products  will  be 
created ;  then  farming  on  an  extended  scale  becomes  profitable, 
and  the  cultivators  are  stimulated  to  draw  from  their  lands  the 
largest  possible  return  for  their  labor  and  skill. 

The  productive  power  of  the  farmer,  as  well  as  of  his  laborer, 
will  always  be  more  or  less  great  in  proportion  as  the  exchange 
of  agricultural  products  for  manufactured  articles  shall  be  more 
or  less  easy.  In  this  regard,  foreign  trade  is  useful  for  a  nation 
somewhat  advanced,  as  has  been  shown,  in  a  former  chapter,  in 
the  case  of  England.  But  a  nation  moderately  civilized,  rich 
and  populous,  finds  in  the  existence  of  domestic  manufactures, 
more  advantages  for  its  agriculture  than  in  the  most  prosperous 
foreign  trade  without  manufactures.  By  domestic  industry  alone 
can  a  nation  protect  itself  against  the  fluctuations  which  war, 
foreign  restrictions  or  commercial  revulsions  produce ;  by  it  is 
saved  the  chief  part  of  the  burden  of  freight  and  commercial 
profits  which  the  export  of  .raw  materials  and  the  import  of 
manufactured  goods  involve ;  from  the  improved  communications 
which  manufacturing  industry  calls  into  existence,  it  derives  the 
immense  advantage  of  awakening  into  activity  a  vast  amount 
of  personal  and  natural  power  hitherto  dormant;  finally,  the 
reciprocal  action  of  manufacturing  industry  and  agriculture 
upon  each  other  is  great  in  proportion  as  the  farmer  and  manu 
facturer  are  in  proximity  to  each  other,  and  as  their  exchanges 
are  less  exposed  to  accidental  interruptions. 

In  the  letters  which  I  addressed  in  1828  to  Charles  J.  Ingersoll, 
President  of  the  Society  for  the  Encouragement  of  the  Fine  Arts 
and  Domestic  Industry  in  Philadelphia — Outlines  of  a  New  Sys 
tem  of  Political  Economy — I  attempted,  in  the  following  words, 
to  show  the  advantages  of  the  union  of  manufacturing  industry 
and  agriculture  in  the  same  territory  and  under  the  same  politi 
cal  authority : 

"  Suppose  that  you  were  ignorant  of  the  art  of  converting 
grain  into  flour —  and  in  its  time  it  must  have  been  regarded  as 


238  THEORY. 

a  great  art ;  suppose  further  that  the  art  of  baking  bread  was 
unknown  in  the  United  States,  as  the  proper  processes  of  salting 
herring  were  unknown  in  England  until  the  seventeenth  century ; 
suppose  in  consequence,  that  you  were  obliged  to  send  your 
wheat  to  England  to  be  converted  into  flour  and  bread,  what 
quantity  of  your  flour  would  England  keep  as  the  price  of 
grinding  and  baking  ?  How  much  of  it  would  be  consumed  in 
the  cost  of  carting,  shipping,  and  by  the  merchants  employed  in 
exporting  the  grain  and  importing  the  bread  !  What  proportion 
would  return  to  the  hands  of  him  who  gathered  the  crop  ?  It 
Cannot  be  doubted  that  such  a  process  would  cause  great 
activity  in  the  channels  of  foreign  commerce  ;  but  it  can  scarcely 
be  pretended-  that  such  a  business  could  be  favorable  to  the 
prosperity  and  the  independence  of  a  country.  In  case  of  war 
between  Great  Britain  and  the  United  States,  what  would  be  the 
V  condition  of  those  who  produce  grain  for  British  mills  and 
bakeries,  and  what  the  condition  of  those  who  relied  upon 
England  for  bread  ?  It  is  then  clearly  the  interest  of  the 
grower  of  wheat  that  he  should  have  easy  access  to  the  miller, 
as  it  is  the  interest  of  agriculture  in  general  that  the  manufac 
turer  should  dwell  in  the  vicinity  of  the  farmer,  as  it  is  the 
interest  of  a  valley  that  a  rich  and  prosperous  town  should  grow 
up  in  it ;  and  of  the  entire  agriculture  of  a  country  that  a  great 
and  prosperous  manufacturing  industry  should  be  developed 
within  it." 

Compare,  for  instance,  the  state  of  agriculture  in  the  vicinity 
of  a  populous  city  with  that  in  remote  districts. 

The  latter  is  applied  only  to  commodities  which  bear  distant 
carriage,  and  which  cannot  be  had  in  the  market  for  which 
they  are  destined  at  a  lower  price  and  of  better  quality  from 
lands  near  the  market.  A  considerable  portion  of  the  pro 
ceeds  of  sale  is  absorbed  in  expenses  of  transport.  The  capital 
expended  in  reproduction  of  a  crop  is  with  difficulty  replaced  by 
any  disposition  which  can  be  made  of  it.  For  want  of  good 
models  and  suitable  instruction,  the  new  processes,  new  imple 
ments,  the  improved  modes  of  culture  scarcely  ever  reach 
remote  places.  The  laborers  themselves,  for  want  of  stimulants 


LABOR    AND    PRODUCTIVE    FORCES.  230 

and  emulation,  develop  but  feebly  their  productive  power,  and 
abandon  themselves  readily  to  inaction  and  carelessness. 

In  the  neighborhood  of  a  city,  on  the  contrary,  the  cultivator 
is  able  to  devote  every  field  of  his  farm  to  the  culture  most* 
appropriate  to  the  nature  of  the  soil,  and  the  whole  to  that  rota 
tion  most  advantageous.  He  can  cultivate  with  profit  the  utmost 
variety  of  products ;  vegetables,  poultry,  eggs,  milk,  butter, 
fruit,  and  other  articles,  which  the*  farmer,  remote  from  market, 
regards  as  insignificant  incidents  of  his  calling,  yield  to  the  labor 
of  the  former  a  large  return.  Whilst  the  remote  farmer  is  reduced 
to  the  mere  rearing  of  cattle,  the  other  is  continually  adding, 
not  only  to  the  fertility  of  his  land,  but  is  making  larger  and 
continually-increasing  profits :  he  is  thus  encouraged  not  only 
to  learn,  but  to  enter  upon  the  most  improved  modes  of  agricul 
ture.  A  multitude  of  objects,  of  little  or  no  value  to  the  remote 
farmer,  such  as  stones,  sand,  water-power,  become  of  immense 
value  to  him  who  is  in  the  vicinity  of  a  large  city  or  a  populous 
manufacturing  district.  Machines  and  implements  of  husbandry 
of  the  best  kind,  with  ample  instructions  as  to  the  best  means 
of  employing  them,  are  ever  at  his  disposal.  He  obtains  readily 
the  needful  capital  to  improve  his  land.  Proprietors  and 
laborers  are  alike  stimulated  by  the  enjoyments  which  the  city 
offers,  and  which  industry  places  within  their  reach,  by  the  emu 
lation  which  it  originates,  by  the  facility  which  larger  profits 
afford  to  employ  in  the  amelioration  of  their  condition  the  whole 
of  their  intellectual  and  physical  powers.* 

*  We  subjoin  an  extract  from  an  American  journal,  which  exhibits  in  a 
striking  form  the  value  to  the  agriculturist  of  a  near  market.  It  must  be 
very  obvious  to  any  one  who  will  take  the  trouble  to  reflect,  that  many  of 
the  products  of  the  farm  are,  from  their  nature  or  their  bulk,  susceptible 
of  transportation  only  short  distances,  except  so  far  as  that  is  modified  by 
railroad  or  canal  transportation  ;  and  that  also  must  have  its  limit.  There 
is  a  work  on  agriculture  in  German,  by  Thunen,  which  is  devoted  to  show 
ing  what  the  agriculture  of  a  district  or  a  farm  should  be,  with  reference 
to  its  distance  from  market.  It  abounds  in  useful  details,  clearly  showing 
the  increased  value  of  that  land  which  has  consumers  for  its  heavier  pro 
ducts  close  at  hand.  This  volume  of  Thunen  is  more  important  for  its 


240  THEORY. 

The  same  difference  with  similar  results  exists  between  a 
nation  on  the  one  hand,  which  unites  upon  its  own  territory 
agriculture  and  manufacturing  industry,  and  one  which,  on  the 
other,  exchanges  its  agricultural  products  for  articles  of  foreign 
manufacture. 

The  social  economy  of  a  nation  in  general  must  be  appreciated 
according  to  the  principle  of  the  division  of  labor  and  of  the 
combination  of  productive  powers.  Public  prosperity,  in  the  asso 
ciation  which  we  call  a  nation,  may  be  compared  to  the  manu 
facture  of  pins.  To  ensure  it  the  largest  scope  and  success 
requires  the  combination  of  many  different  productive  powers  in 
close  proximity  and  under  one  regular  administration.  The 
main  division  of  labor  in  the  nation  is  that  of  intellectual  labor 
and  material  labor.  These  are  strictly  dependent  upon  each 

reference  to  political  economy,  than  very  many  professedly  devoted  to  the 
subject. 

"  If  a  ton  of  corn  is  worth  $24.75,  and  one  of  wheat  $49.40,  in  the 
market,  the  following  would  be  their  respective  values  at  the  several 
distances  from  market  mentioned,  by  railroads  and  ordinary  roads : 

Railroad.  Ordinary  Road. 

Wheat.  Corn.  Wheat.  Corn. 

At  market.      $49.50 $24.75 $40.50 $24.75 

10  miles,        49.25 24.60 48.00 23.20 

50      "  48.75 24.00 42.00 17.25 

100      "  48.00 23.25 34.50 9.75 

150      "  47.25 22.50 27.00 2.25 

160      "  47.10 22.35 25.50 0.75 

170      "  46.95 22.10 24.00 0.00 

200     "  46.50 21.75 19.50 0.00 

300      "  45.00 20.25 4.40 0.00 

320      "  44.70 19.95 1.50 0.00 

330     "  44.55 18.80 0.00 0.00 

"  It  is  thus  made  evident  that  a  ton  of  corn,  if  carried  170  miles  to  market 
by  the  ordinary  means  of  transporting  by  wagon,  will  not  produce  one  cent 
more  than  it  has  actually  cost  the  grower — its  whole  value  being  absorbed 
by  its  conveyance  to  market ;  while,  if  transported  the  same  distance  by 
railroad,  the  nett  proceeds  of  its  sale  would  be  more  than  $22.  The  trans 
portation  of  a  ton  of  wheat,  by  the  same  calculation,  would  exhaust  its 
value  at  the  distance  of  330  miles,  if  made  in  a  wagon,  while  by  the  rail 
road  it  would  be  worth  more  than  $44  beyond  the  cost  of  getting  it  to 
market." 


LABOR    AND    PRODUCTIVE    FORCES.  241 

other.  The  more  successfully  the  intellectual  division  extends 
and  developes  morality,  religious  sentiment,  knowledge,  liberty, 
and  good  government,  the  safety  of  persons  and  property  at 
home,  and  the  independence  and  power  of  the  nation  abroad, 
the  larger  will  be  the  material  production,  the  greater  the  sum 
of  national  wealth  produced,  and  the  greater,  too,  will  be  the 
progress  and  energy  of  the  intellectual  power. 

The  highest  division  of  labor,  the  highest  combination  of 
powers  in  material  production,  is  that  of  agriculture  and  manu 
facturing  industry.  It  has  been  already  shown  that  these  two 
industries,  properly  regarded,  make  but  one  "entire  interest. 

In  a  nation,  as  in  a  pin  manufactory,  the  productive  power 
of  each  individual,  of  each  branch  of  industry,  depends  upon  an 
exact  proportion  in  the  activity  of  all  the  departments  with 
regard  to  each  other.  This  is  what  we  call  the  equilibrium,  or 
harmony  of  productive  powers.  A  country  may  have  too  many 
philosophers,  philologists,  and  literary  men,  and  not  enough 
workmen,  artists,  merchants,  and  seamen.  This  overstock  of 
literary  culture  is  demanded  neither  by  manufacturing  industry, 
however  advanced,  nor  by  a  vast  home  and  foreign  trade ;  it  is 
just  as  if  in  a  pin  manufactory  more  heads  were  made  than 
points,  A  similar  excess  to  that  of  the  pin-heads  may  consist  in 
a  multitude  of  useless  books,  of  subtle  systems,  and  of  learned 
controversies,  which  spread  darkness  over  a  nation,  rather  than 
light,  divert  its  attention  from  useful  occupations,  and  conse 
quently  hinder  the  development  of  its  productive  power,  almost 
as  much  in  the  same  way  as  too  many  priests  and  not  enough 
teachers,  too  many  soldiers  and  not  enough  statesmen,  too  many 
executive  officers  and  not  enough  judges  and  lawyers. 

A  nation  exclusively  devoted  to  agriculture  is  like  an  indi 
vidual  carrying  on  his  material  production  with  the  privation  of 
an  arm.  Commerce  is  but  an  agent  between  agriculture  and 
manufacturing  industry,  and  between  their  particular  branches. 
A  nation  exchanging  its  agricultural  products  for  articles  of 
foreign  manufacture  is  like  an  individual  with  but  one  arm  who 
invokes  the  assistance  of  a  foreign  arm  for  his  support.  Such 
assistance  may  be  useful  for  him,  but  cannot  supply  the  place 
16 


242  THEORY. 

of  the  missing  arm,  for  the  very  good  reason  that  its  motions  are 
wholly  subject  to  the  caprice  of  a  foreign  head.  A  nation  pos 
sessing  its  own  manufacturing  industry  can  produce  as  much 
food  and  raw  material  as  its  own  manufactures  can  consume ; 
a  country  depending  on  foreign  manufactures  can  produce  only 
such  products  for  export  as  foreign  nations  cannot  produce 
themselves,  and  such  as  they  are  compelled  to  purchase  from 
abroad. 

Division  of  labor  and  association  of  productive  powers  exist 
also  between  the  different  nations  of  the  world,  just  as  between 
the  various  parts  of  a  country.  Instead  of  an  interior  or  national 
commerce,  it  is  international  commerce  which  serves  as  the 
intermediate  agency.  But  international  association  of  produc- 
/  tive  powers  is  very  imperfect,  being  frequently  interrupted  by 
wars,  by  restrictions,  commercial  revulsions,  etc.  Though  it 
may  in  some  aspects  claim  the  highest  dignity,  as  it  connects 
together  the  different  nations  of  the  world,  yet  if  regard  be  had 
to  the  particular  prosperity  of  nations  already  advanced  in 
civilization,  international  association  and  commerce  are  of  far 
/  the  least  importance,  and  this  is  what  the  school  concedes  in  the 
maxim  that  the  interior  trade  of  a  nation  is  incomparably  more 
important  than  its  foreign  trade.  It  follows  thence  that  it  is 
the  policy  of  a  great  nation  to  make  the  national  or  internal 
association  of  productive  powers  the  principal  object  of  its  study 
and  its  efforts,  and  to  keep  international  association  in  a  subor 
dinate  position  as  a  secondary  interest. 

The  international  division  of  labor  as  well  as  the  national 
division  depends  mainly  on  climate  and  nature.  Tea  cannot  be 
produced  in  all  countries,  as  it  is  in  China ;  spices,  as  in  Java ; 
cotton,  as  in  Louisiana;  wheat,  wool,  fruit,  manufactured  arti 
cles,  as  in  the  countries  of  the  temperate  zone.  It  would  be 
very  unwise  in  a  nation  to  attempt  obtaining  by  national 
division  of  labor  or  by  indigenous  production,  articles  for  which 
nature  had  not  furnished  the  requisite  power  or  facility,  and 
which  can  be  procured  from  climates  more  favorable  to  their 
production  at  a  much  cheaper  rate  and  of  better  quality  by  means 
of  foreign  trade ;  but  it  would  imply  a  want  of  intelligence  and 


PRIVATE    AND    NATIONAL    ECONOMY.  243 

enterprise  if  a  nation  should  neglect  or  refuse  to  employ  all  its 
disposable  powers  in  ministering  to  its  own  wants  and  in  obtain 
ing  by  its  own  industry  such  a  surplus  of  production  as  will 
purchase  all  such  commodities  as  nature  refuses  to  its  climate 
or  soil. 

The  countries  most  favored  by  nature  for  both  the  national 
and  international  division  of  labor  are  obviously  those,  the  soil 
of  which  produces  articles  of  the  first  necessity,  of  the  best 
quality,  and  at  the  least  cost,  and  the  climate  of  which  most 
favors  labor  of  mind  and  body ;  such  are  the  countries  of  the  tem 
perate  zone.  In  these,  especially,  manufacturing  industry 
flourishes,  and  nations  attain  the  highest  degree  of  intellectual  and 
social  development  and  political  power,  though  they  remain  in  some 
degree  tributary  to  tropical  countries  and  to  nations  of  a  lower 
culture.  The  countries  of  the  temperate  zone  are  under  obliga 
tions,  above  all  others,  to  carry  national  or  domestic  division  of 
labor  to  its  highest  degree  of  perfection,  and  only  to  resort  to 
the  international  or  foreign  trade,  for  such  augmentation  of 
wealth  and  comfort  as  it  is  properly  fitted  to  afford. 


CHAPTER  IV. 

PRIVATE  ECONOMY  AND  NATIONAL  ECONOMY. 

AIDED  by  history,  we  have  proved  that  national  unity  is  an 
essential  condition  of  durable  prosperity ;  we  have  shown  that  only 
where  private  interest  has  been  subordinate  to  public  interest, 
and  where  a  succession  of  generations  has  pursued  one  object, 
have  nations  attained  an  harmonious  development  of  their  produc 
tive  power,  that  without  the  collective  labors  of  the  individuals 
of  not  merely  one  generation,  but  even  of  successive  generations, 
towards  a  common  end,  private  industry  cannot  flourish.  In  the 
preceding  chapter  we  have  tried  to  show  in  what  way  the  law  of 
the  association  of  power  exercises  a  beneficent  influence  in  a  manu 
factory,  and  how  it  operates  with  the  same  energy  upon  the  in- 


244  THE  OK  Y. 

dustry  of  entire  nations.  We  shall  exhibit  in  this  chapter  how 
the  School  has  masked  its  ignorance  of  national  interests  and 
of  the  effects  of  the  association  of  national  productive  forces, 
by  confounding  the  maxims  of  private  with  those  of  public 
economy. 

"  What  is  prudence  in  the  conduct  of  every  private  family  can 
scarce  be  folly  in  that  of  a  great  kingdom.  ...  By  pursuing  his 
own  interest,  he  promotes  that  of  society.  .  .  .  What  is  the  species 
of  domestic  industry  which  his  capital  can  employ,  and  of  which 
the  produce  is  likely  to  be  of  the  greatest  value,  every  individual, 
it  is  evident,  can,  in  his  local  situation,  judge  much  better  than  any 
statesman  or  lawgiver  can  do  for  him.  The  statesman  who 
should  attempt  to  direct  private  people  in  what  manner  they 
ought  to  employ  their  capital  would  not  only  load  himself  with 
a  most  unnecessary  attention,  but  assume  an  authority  which 
could  safely  be  trusted,  not  only  to  no  single  person,  but  to  no 
council  or  senate  whatever,  and  which  would  nowhere  be  eo 
dangerous  as  in  the  hands  of  a  man  who  had  folly  and  presump 
tion  enough  to  fancy  himself  fit  to  exercise  it."* 

Hence  Adam  Smith  concludes  that  commercial  restrictions, 
with  the  object  of  encouraging  the  industry  of  a  country,  are 
•/  absurd ;  that  a  nation,  like  an  individual,  must  purchase  in  the 
cheapest  market ;  and  that,  in  order  to  reach  the  highest  point 
of  public  prosperity,  it  is  only  necessary  to  give  heed  to  the 
maxim  of  "Let  men  alone,  let  things  take  their  course."  Smith 
and  Say  compare  a  nation  which  attempts  to  encourage  its 
industry  by  the  aid  of  protecting  duties,  to  a  tailor  who  would 
manufacture  his  own  shoes,  and  to  a  shoemaker  who  would  exact 
toll  at  his  own  door,  for  the  purpose  of  increasing  his  wealth. 

Thomas  Cooper,  in  a  book  written  against  the  American  pro 
tective  system,t  carries  that  idea  to  an  extreme,  as  he  does  other 
errors  of  the  School.  "Political  economy,"  he  says,  "is  nearly 
the  same  thing  as  the  private  economy  of  all  individuals ; 
politics  are  not  an  essential  element  of  political  economy  ;  it  is 
nonsense  to  make  a  distinction  between  human  society  and  the 

*  Smith :  Wealth  of  Nations,  book  iv.,  ch.  ii. 
*>        f  Lessons  on  Political  Economy,  by  Thomas  Cooper. 


PRIVATE    AND    NATIONAL    ECONOMY.  245 

individuals  of  which  it  is  composed.  Every  one  knows  perfectly 
well  how  to  employ  his  own  labor  and  capital.  The  wealth  of 
society  is  nothing  else  than  the  agglomeration  of  the  wealth  of 
all  the  individuals,  and  if  every  one  knows  better  than  any  one 
else  his  own  interest,  the  richest  nation  must  be  that  in  which 
each  individual  is  left  most  entirely  to  himself."  * 

The  partizans  of  the  American  protective  system  had  already 
replied  to  that  argument,  when  advanced  in  favor  of  free  trade 
by  importing  merchants,  that  the  laws  of  navigation  had  given 
a  vigorous  impulse  to  the  shipping  interests  of  foreign  trade  and 
to  the  fisheries  of  the  United  States,  and  that  millions  were 
expended  yearly  upon  the  navy,  merely  to  protect  the  shipping ; 
that  conformably  to  the  theory,  those  laws  and  that  expense 
were  quite  as  reprehensible  as  protective  duties.  "After  all," 
exclaims  Cooper,  "there  is  no  maritime  commerce  worth  a 
maritime  war;  let  the  merchants  protect  themselves  !" 

Thus,  the  School,  which  commenced  by  shutting  its  eyes  to 
nationality  and  national  interests,  ends  by  questioning  their 
existence,  and  proposing  that  individuals  be  left  to  their  own 
defence. 

How !  the  wisdom  of  private  economy  is  then  the  wisdom  of 
public  economy  !  Is  it  in  the  nature  of  an  individual  to  be 
preoccupied  with  the  business  and  the  wants  of  the  future,  as  it 
is  in  the  nature  of  a  nation  and  of  a  government  ?  Consider 
only  the  building  of  an  American  city ;  each  man  left  to  himself 
would  think  only  of  his  own  wants,  or,  at  the  utmost,  of  those  of 
his  immediate  descendants ;  the  mass  of  individuals  as  united  in 

*  This  argument  is  a  perfectly  good  one  for  the  entire  dissolution  of  so 
ciety.  For  if  men  can  be  entirely  let  alone  on  matters  in  which  they  are 
so  deeply  under  temptation  to  impose  upon  their  fellow-men,  they  may  well 
be  trusted  in  everything  else.  Offences  against  society  and  good  morals,  in 
our  present  social  system,  in  matters  of  property,  trade,  and  money,  are 
vastly  more  numerous  than  any  other  offences ;  if  all  the  barriers  of  this 
kind  were  removed,  the  rest  would  soon  be  broken  down.  Society,  in  fact, 
could  not  exist  one  day,  if  the  system  of  laissez  faire  laissez  passer  were 
carried  out  to  the  extent  of  its  logical  demands.  Nay,  even  if  restricted  to 
the  phrase,  "All  is  fair  in  trade,"  it  would  destroy  society,  and  send  men 
to  take  refuge  in  the  savage  state.  What  reason  can  be  given  why  men 
should  be  let  alone  in  trade  more  than  in  anything  else  ?  —  [S.  C.J 


246  THEORY. 

society  are  not  unmindful  of  the  interests  and  advantages  even 
of  the  remotest  coming  generations ;  the  living  generation,  with 
that  view,  submits  calmly  to  privations  and  sacrifices  which  no 
sensible  man  could  expect  from  individuals  in  reference  to  the 
interests  of  the  present,  or  from  any  other  motives  than  those 
of  patriotism  or  national  considerations.  Moreover,  can  indi 
viduals  engaged  in  their  private  affairs  take  into  consideration 
the  defence  of  the  country,  public  security,  and  a  thousand 
objects  which  can  be  attained  only  by  society?  Does  not  a 
nation  wisely  impose  for  that  purpose  restriction  upon  the  liberty 
of  individuals  ?  Does  it  not  demand  the  sacrifice  of  a  portion 
of  their  income,  of  a  part  of  their  intellectual  and  bodily  labor, 
nay,  even  of  their  lives  ?  Before  adopting  such  opinions,  we 
must  concur  with  Cooper,  in  effacing  all  notions  of  a  state  and 
of  human  association  or  society. 

That  may  indeed  be  folly  in  private  economy,  which  is  wisdom 
in  public  economy,  and  reciprocally,  for  the  simple  reason,  that 
a  tailor  is  not  a  nation,  and  that  a  nation  is  not  a  tailor,  that  a 
family  is  quite  another  thing  than  an  association  of  millions  of 
families,  and  the  house  another  thing  than  a  vast  territory. 

If  an  individual  knows  and  understands  better  than  any  one 
else  his  own  interest,  he  does  not  always  consult  the  interests 
of  the  nation  in  his  unrestrained  activity.  Let  us  ask  those  who 
sit  in  the  courts  of  justice,  whether  they  do  not  frequently  send 
men  to  compulsory  labor  for  an  excess  of  freedom  in  their  indi 
vidual  industry  ?  Robbers,  thieves,  smugglers  and  swindlers 
know  perfectly  well  their  own  business,  and  devote  themselves 
with  vigilant  attention  to  their  own  concerns  as  they  understand 
them ;  but  it  does  not  follow  thence,  that  society  is  prosperous 
in  proportion  as  such  individuals  are  less  hindered  in  the  pursuit 
of  their  private  industry. 

Innumerable  are  the  instances  in  which  public  authority  is 
compelled  to  restrain  the  power  and  inclinations  of  individuals 
in  the  pursuit  of  their  private  industry.  It  prohibits  the  slave 
trade  to  the  owner  of  ships ;  it  prescribes  the  mode  of  fitting  up 
and  provisioning  steamers  and  other  ressels,  and  enforces  suitable 
maritime  regulations  for  the  protection  of  passengers  and  sailors, 


PRIVATE    AND    NATIONAL    ECONOMY.  247 

that  they  may  not  be  wholly  left  to  the  cruelty  and  cupidity  of 
captains  and  owners.  It  is  said  to  have  been  proposed  in  England, 
to  make  some  changes  in  the  construction  of  ships,  an  infernal 
league  having  been  discovered  between  insurance  companies  and 
ship-owners  by  which  thousands  of  human  lives  and  millions  in 
value  would  have  been  sacrificed  yearly  to  the  avarice  of  indi 
viduals.  In  the  United  States  of  North  America,  the  miller  is 
obliged  by  law  to  put  not  less  than  one  hundred  and  ninety-six 
pounds  of  flour  in  a  barrel;  and  there  are  inspectors  as  to 
quality  and  quantity  in  all  markets,  though  in  no  other  country 
is  a  higher  estimate  placed  upon  individual  liberty.  The  public 
authorities  are  everywhere  expected  to  secure  the  people  against 
the  danger  and  the  injuries  to  which  they  are  exposed,  for 
instance,  in  the  trade  in  provisions,  and  in  the  sale  of  drugs. 

"But,"  the  School  replies,  "the  cases  you  cite  are  culpable 
attacks  upon  persons  and  property;  such  acts  are  not  the 
honest  trade  which  is  employed  upon  useful  objects ;  that  is 
not  the  innocent  and  profitable  action  of  individuals,  which  the 
Government  has  no  right  to  restrain."  This  rule  is  undoubtedly 
sound,  so  long  as  this  action  is  innocent  and  useful ;  but  what  is 
innocent  and  useful  in  the  commerce  of  the  world  in  general, 
may  be  injurious  and  dangerous  in  the  commerce  of  a  particular 
country,  and  reciprocally.  In  time  of  peace,  and  in  the  cos 
mopolite  point  of  view,  privateering  is  a  hurtful  employment ; 
in  time  of  war  it  is  favored  by  governments.  The  premeditated 
immolation  of  a  man  is  a  crime  in  time  of  peace ;  it  may  be  a  duty  * 
in  time  of  war.  The  trade  in  powder,  lead  and  arms  is  permitted 
during  peace,  but  he  who  during  war  sends  such  articles  to  the 
enemy  is  punished  as  a  traitor.* 

From  similar  considerations  governments  are  not  only  author- 

*  It  may  be  said  these  are  all  exceptional  cases ;  but  who  is  to  draw  the 
line  where  the  exception  is  to  end?     Who  is  to  be  the  judge  of  what  is  due 
to  public  safety  or  comfort,  the  interested  individual  or  public  authority  ? 
Who  is  to  decide  what  is  a  public  nuisance  and  what  is  not,  the  man  who 
offends  or  the  public  which  is  offended  ?     No  sound  reason  can,  we  repeat      / 
it,  be  given,  why  men  should  be  let  alone  in  trade,  any  more  than  in  any-  ** 
thing  else.  —  [S.  C.] 


248  THEORY. 

ized,  but  bound  by  the  interests  of  a  nation  to  restrict  or  regu 
late  employments  harmless  in  themselves.  The  enactment 
of  prohibitions  and  protective  duties  does  not  prescribe  to  in 
dividuals,  as  the  School  falsely  maintains,  the  use  which  they 
are  to  make  of  their  productive  power  and  their  capital.  The 
government  does  not  declare  to  one,  You  shall  lay  out  your 
money  in  the  building  of  a  manufactory,  or  in  the  establishment 
of  a  business ;  nor  does  it  declare  to  another,  You  shall  be  a 
ship-captain,  or  a  civil  engineer ;  it  leaves  to  every  one,  within 
the  limits  of  the  public  welfare,  the  liberty  of  making  use  of  his 
capital  as  he  thinks  proper,  and  of  selecting  the  profession  he 
prefers.  It  only  says  :  our  country  has  an  interest  in  manufac 
turing  at  home  a  particular  article ;  but  as  free  competition 
with  foreign  countries  would  prevent  our  success,  we  limit  that 
competition,  so  far  as  may  be  necessary,  to  secure  those  among 
us  who  may  be  willing  to  embark  their  capital,  or  devote  their 
physical  and  intellectual  power,  to  that  new  branch  of  industry, 
from  the  loss  of  their  capital,  and  from  the  waste  of  their  labor, 
and  to  induce  foreigners  to  come  among  us  with  their  skill  and 
productive  power.  So  that  government  does  not  by  this  policy 
restrain  private  industry ;  it  opens,  on  the  contrary,  a  new  and 
wider  field  of  activity  to  personal  and  natural  power  as  well  as 
to  the  capital  of  a  country.  Par  from  doing  anything  which 
individuals  could  do  better,  the  government  does  that  which 
individuals  cannot  do  at  all,  whatever  their  intelligence  and 
enterprise,  and  however  abundant  their  capital  may  be.* 

*  Society  being  an  association  for  the  best  interests  of  all  concerned, 
whatever  be  the  form  of  government,  the  omission  of  the  government  to 
fulfil  its  duty,  and  do  the  good  it  might  do,  may  be  as  injurious  to  the 
public  interests  as  acts  that  are  wrong  or  mistaken.  The  government 
might  determine  that  a  whole  population,  enjoying  every  possible  facility 
and  advantage  for  general  industry,  must  remain  agriculturists,  and  that 
individuals  should  have  no  chance  or  choice  of  any  other  employment,  and 
enforce  that  determination  very  effectually  by  merely  allowing  other  na 
tions  unrestrained  access  to  its  markets.  By  thus  leaving  the  door  open  to 
the  products  of  others'  industry,  individuals  would  bo  as  positively  debarred 
and  prevented  from  engaging  in  hundreds  of  employments,  as  if  these  em 
ployments  had  been  specifically  forbidden  by  the  legislature  or  public 


PRIVATE    AND    NATIONAL    ECONOMY.  249 

The    assertion   of  the    School,    that   the   protective   system 
involves   an   illegitimate   and   anti-economical  intervention   of 
government  in  the  investment  of  capital  and  in  the  occupations 
of  individual  industry,  falls  of  itself,  if  we  consider  that  for  the 
most  part  foreign  commercial  regulations  are  the  causes  which    / 
provoke  and  make  needful  such  interference  with  private  indus-    ' 
try,  and  that  it  is  only  by  the  aid  of  the  protective  system  that 

authority.  What  choice  have  men  in  Ireland  of  engaging  in  the  number 
less  branches  of  industry  which  are  open  to  capital  and  enterprise  in  • 
England  and  Scotland  ?  If  the  United  States  were  resolved  to  adopt  the 
let  alone  policy,  they  would  not  need  to  make  any  positive  enactment,  but 
simply  to  repeal  all  laws  in  regard  to  shipping,  port-duties,  and  duties  on 
merchandise  ;  and  the  people  might  then  starve  down,  as  has  occurred  in 
Ireland,  to  what  would  be  the  proper  population  in  that  case.  This  nega 
tive  protection  is  precisely  that  which  suits  the  importer  of  foreign  goods. 
To  protect  the  manufacture  of  cottons  and  woollens,  and  iron,  by  two  hun 
dred  per  cent.,  would  not  favor  those  manufactures  so  much  as  the  omission 
to  protect  them  at  all  would  favor  the  importers.  For  such  a  protection 
would  soon  beget  a  home  industry  producing  articles  at  a  cost',  as 
has  occurred  even  in  the  short  duration  of  our  protective  duties,  below  the 
amount  of  the  duty.  But  competition  in  importing  is  never  so  effective  for 
the  benefit  of  the  public,  because  it  tends  to  raise  prices  where  the  goods 
are  purchased.  Importation  is  more  apt  to  be  swayed  by  the  power  of 
capital,  or  by  all  the  uncertainties  and  mischiefs  of  speculation  and  mono 
poly. 

We  say,  then,  that  where  industry  and  capital  are  to  have  a  choice  of 
pursuits,  the  government  must  provide  an  arena  for  the  exhibition  of  in 
dustry,  and  protect  it  from  intrusion,  so  long  as  may  be  necessary.  And 
where  more  regard  is  paid  to  the  interests  of  the  millions  who  labor,  than 
to  the  interests  of  foreign  trade,  this  industry  should  continue  to  be  pro 
tected  from  the  revulsions  and  gluts  of  foreign  markets,  from  the  cheaper 
labor  and  the  insufficiently  paid  laborers  of  foreign  countries,  and  from  all 
other  foreign  causes  which  might  disturb  the  relations  between  the  home 
laborer  and  his  daily  bread. 

The  School  say  that  protective  duties  divert  capital  from  its  legitimate 
channels,  and  compel  men  to  invest  it  in  employments  of  which  they  would 
not  otherwise  think.  It  may  be  replied  that  the  want  of  it  compels  men  to 
invest  it  in  commerce  or  agriculture,  without  any  other  choice.  But  foreign 
commerce,  so  far  as  it  is  pursued  by  residents  of  the  country,  is  itself  a 
creature  of  protection.  No  interest  more  requires  the  special  care  of  the 
country  ;  and  not  only  care,  but  more  public  expenditure,  than  its  shipping. 
-[S.C.] 


250  THEORY. 

we  are  able  to  avert  the  fatal  effects  of  mistaken  or  unfriendly 
policy.  When  the  English  exclude  our  grain  from  their  markets, 
do  they  not  forbid  our  cultivators  from  sowing  the  wheat  which 
under  the  regimen  of  free  trade  they  would  have  sent  to 
England  ?  If  their  regulations  impose  upon  our  woollens,  our 
wines,  or  our  timber  such  high  duties  that  our  exports  to 
England  are  almost  wholly  cut  off,  is  not  the  British  government 
thereby  interfering  with  and  restraining  in  a  certain  degree 
some  branches  of  our  industry  ?  It  is  obvious  that  in  such  cases 
foreign  legislation  gives  to  our  personal  productive  power  a 
direction  which  it  would  not  otherwise  have  assumed.  It  is 
obvious  then,  that  if  we  neglect  by  our  own  legislation  to  give 
our  own  national  industry  a  direction  conformable  to  our  in- 
^terests,  we  cannot  prevent  foreigners  from  so  regulating  their 
own  industry  with  a  view  to  their  real  or  supposed  interests,  as 
seriously  to  impair,  if  not  to  stop  the  development  of  our  pro 
ductive  power.  Which,  then,  is  the  more  reasonable,  which  is 
the  more  advantageous  public  policy,  —  to  leave  our  indivi 
dual  industry  to  the  control  of  foreign  legislation,  or  to  regulate 
it  ourselves  in  conformity  with  our  own  interests  ?  Does  the 
German  or  American  cultivator  imagine  himself  under  less 
restraint  when  compelled  to  shape  his  business  yearly  by  the 
course  of  British  legislation,  and  to  watch  if  he  must  extend  or 
restrict  his  production  of  wheat  or  wool,  as  the  acts  of  Parlia 
ment  for  the  year  indicate,  than  when  foreign  manufactured 
articles  are  less  abundant,  and  when  all  his  products  are  sure 
of  a  market  which  cannot  be  taken  from  him  by  foreign  tariffs  ?  * 

*  The  School,  using  the  term  employed  by  the  author,  admits  not,  or 
admits  no  longer,  however  frequently  it  may  have  been  asserted  in  its  name, 
that  protection  constitutes  an  absolute  and  permanent  monopoly  in  favor 
of  manufacturers.  Upon  .this  subject,  we  copy  a  note  of  Ricardo,  in  the 
22d  chapter  of  his  "Principles  of  Political  Economy  and  Taxation:"  — 

"  M.  Say  supposes  the  advantage  of  the  manufacturers  at  home  to  be 
more  than  temporary.  *  A  government  which  absolutely  prohibits  the  im 
portation  of  certain  foreign  goods  establishes  a  monopoly  in  favor  of  those 
who  produce  such  commodities  at  home,  against  those  who  consume  them ; 
in  other  words,  those  at  home  who  produce  them  having  the  exclusive  pri 
vilege  of  selling  them,  may  elevate  their  price  above  the  natural  price ;  and 


PRIVATE    AND    NATIONAL    ECONOMY.  251 

When  the  School  pretends  that  protecting  duties  ensure  to 
the  manufacturers  of  a  country  a  monopoly  at  the  cost  of  the 

the  consumers  at  home,  not  being  able  to  obtain  them  elsewhere,  are  obliged 
to  purchase  them  at  a  higher  price.'  — Vol.  i.  p.  201. 

"  But  how  can  they  permanently  support  the  market  price  of  their  goods 
above  the  natural  price,  when  every  one  of  their  fellow-citizens  is  free  to 
enter  into  the  trade  ?  They  are  guaranteed  against  foreign,  but  not  against 
home  competition.  The  real  evil  arising  to  the  country  from  such  mono 
polies,  if  they  can  be  called  by  that  name,  lies,  not  in  raising  the  market 
price  of  such  goods,  but  in  raising  their  real  and  natural  price.  By  in 
creasing  the  cost  of  production,  a  portion  of  the  labor  of  the  country  ia 
less  productively  employed." 

Say  had  the  candor  to  acknowledge  his  error.  "Ricardo,"  says  he, 
"  appears  to  be  in  the  right  in  disputing  my  position.  In  fact,  when  a 
government  prohibits  a  foreign  product,  the  profits  made  in  the  interior 
upon  its  production  do  not  rise  above  the  common  rate  of  profits ;  for,  if 
they  were  so  raised,  the  producers  of  the  interior  would,  by  their  competi 
tion  in  this  particular  production,  bring  them  back  to  the  ordinary  level. 
I  ought,  then,  in  explaining  my  thought,  to  have  said  that  I  looked  upon 
the  natural  rate  of  merchandise  as  being  the  lowest  price  at  which  it  can 
be  procured  by  way  of  commerce,  or  by  any  other  industry.  If  commercial 
industry  can  furnish  goods  at  a  cheaper  rate  than  manufactures,  and  if  the 
government  enforces  their  manufacture,  it  compels  men  to  purchase  them 
at  a  higher  rate  than  they  could  obtain  them  for  elsewhere." 

In  face  of  this  opinion  of  Say,  it  appears  appropriate  to  place  the  follow 
ing  opinion  of  Adam  Smith  :  —  "  By  means  of  such  regulations,  indeed,  a 
particular  manufacture  may  sometimes  be  acquired  sooner  than  it  could 
have  been  otherwise,  and  after  a  certain  time  may  be  made  at  home  as 
cheap,  or  cheaper,  than  in  the  foreign  country.  (McCulloch's  Edition, 
Book  IV.,  Chap.  II.,  page  200.)  —  [H.  R.J 

McCulloch  himself,  in  a  note  at  page  201,  reiterates  this  position : — 
"  The  advantage  they  derive  from  the  monopoly  is  really  very  inconsidera 
ble.  Competition  being  always  free  among  the  home  producers,  the  exclu 
sion  of  any  particular  species  of  foreign  manufactured  goods  cannot  elevate 
the  profits  of  those  who  produce  similar  articles  at  home  above  the  common 
level,  and  merely  attracts  as  much  additional  capital  to  that  particular 
business  as  may  be  required  to  furnish  an  adequate  supply  of  goods.  It 
has  never  been  contended  that  the  businesses  deepest  entrenched  behind 
ramparts  of  prohibitions  and  restrictions,  are  in  any  respect  more  lucrative 
than  those  that  are  exposed  to  the  freest  competition." 

Here  are  three  separate  admissions  by  great  masters  in  Political  Eco- 
mony,  which  are  clearly  not  in  keeping  with  their  general  system,  and  they 
are  still  less  consistent  with  the  opinions  of  free  trade  writers,  orators,  and 


252  THEORY. 

consumers  of  the  country,  they  deal  in  sophistry,  not  in  argu 
ment  ;  for  every  individual  in  the  country  being  at  liberty  to 
make  the  most  of  the  home  market  thus  secured  to  national 
industry,  there  is  no  private  monopoly,  there  is  merely  a  privi 
lege  granted  to  our  own  countrymen  as  against  strangers,  a 
privilege  the  more  legitimate,  as  strangers  enjoy  or  may  enjoy 
the  same  in  their  own  country.  There  is  no  absolute  privilege, 
neither  for  the  benefit  of  producers  nor  for  the  detriment  of 
consumers;  for  if  at  the  beginning  producers  demand  high 
prices,  the  reason  is  that  they  have  to  encounter  the  great  risks, 
the  repeated  losses,  extraordinary  sacrifices  which  always  attend 
the  establishment  of  a  new  manufacture.  But  against  any 
undue  exaggeration  of  profits,  or  unlimited  duration  of  high 
prices,  consumers  have  a  guarantee  in  the  home  competition 
which  is  sure  to  follow,  and  which  generally  reduces  prices 
lower  than  the  rates  under  free  foreign  competition.  If  the 
agriculturists,  who  are  the  chief  consumers  of  manufactures, 
pay  higher  prices  for  manufactured  articles,  they  have  ample 
/  compensation  for  that  inconvenience  in  higher  prices  and  greater 
demand  for  products  of  the  soil. 

The  School  is  guilty  of  another  sophism,  which  masks  the 
confusion  of  the  theory  of  values  and  that  of  productive 
power,  when  from  its  maxim  that  national  wealth  is  nothing  but 
the  union  of  the  wealth  of  all  individuals,  and  that  the  private 
interests  of  each  individual  have  more  power  than  all  the  mea 
sures  of  governments  in  aid  of  the  production  and  accumulation 

reviewers,  who  have  occupied  so  largely  the  attention  of  the  public  for 
many  years,  and  who  have  denounced  the  monopoly  created  by  high  duties, 
and  proclaimed  that  the  monopolists  were  enriched  at  the  expense  of  the 
community. 

Perhaps  no  weapon  has  been  wielded  with  more  success  against  the 
protective  policy  than  the  oft  repeated  allegation  that  high  duties  constitute 
a  species  of  class  legislation ;  that  the  result  was  to  legislate  money  out  of 
the  pockets  of  the  consumers  into  the  pockets  of  the  manufacturers.  Here 
we  find  three  great  masters  of  the  science  conceding  that  this  is  not  the 
case.  It  is  simply  a  sacrifice  imposed  upon  consumers  for  a  time,  to  secure 
a  greater  advantage  in  the  future.  —  [S.  C.j 


PRIVATE    AND    NATIONAL    ECONOMY.  253 

of  wealth,  it  concludes  that  national  industry  is  in  the  best  path 
to  prosperity  when  each  individual  is  left  to  the  undisturbed 
prosecution  of  his  own  labors.  Even  if  this  maxim  were  admit 
ted,  the  conclusion  of  the  School  would  not  necessarily  follow, 
for,  as  we  have  shown  in  a  preceding  chapter,  the  object  is  not 
to  increase  directly  by  means  of  commercial  restrictions  the 
sum  of  exchangeable  values  in  a  country,  but  its  productive 
power.  Now  the  sum  of  the  productive  power  of  a  nation  is  not  \/ 
equivalent  to  the  union  of  the  productive  power  of  every  indivi 
dual  in  the  country ;  it  depends  chiefly  upon  social  and  political 
condition,  and  particularly  upon  the  degree  in  which  a  nation 
has  realized  at  home  the  division  of  labor  and  the  association 
of  productive  power,  as  we  have  sufficiently  explained  in  the  last 
chapter. 

The  system  of  the  School  contemplates  only  individuals  en 
joying  full  liberty  in  their  reciprocal  relations,  individuals  satis 
fied,  provided  they  be  left  to  their  own  natural  instincts,  which 
ever  stimulate  men  to  pursue  their  own  interests.  It  is  obvious 
that  this  is  not  a  system  of  national  economy,  but  a  system  of 
individual  economy,  such  as  might  occur  without  the  inter 
vention  or  protection  of  governments,  without  war,  without  the  v 
hostile  measures  of  unfriendly  countries.  It  cannot  explain  by 
what  means  nations  now  flourishing  have  attained  their  actual 
degree  of  prosperity  and  power,  and  by  what  causes  others  have 
lost  their  former  prosperity  and  power.  It  shows  how,  in  pri 
vate  industry,  the  natural  agents,  viz.,  labor  and  capital,  concur 
in  producing  for  the  market  many  valuable  articles,  and  how 
these  articles  are  distributed  and  consumed  among  men.  But  it 
does  not  show  how  to  bring  into  activity  and  to  give  value  to 
the  natural  power  at  the  disposition  of  a  whole  people,  how  to 
conduct  a  poor  or  feeble  nation  to  prosperity  and  power  :  it  does 
not  enter  into  such  considerations,  because  the  School,  repelling 
absolutely  all  public  intervention,  remains  in  ignorance  of  the 
particular  condition  of  different  nations,  and  seeks  only  the 
prosperity  of  all  mankind.*  When  the  subject  is  international 

*  The  science  of  the  School  being  founded  wholly  upon  individual  action, 
to  favor  the  action  of  all  the  individuals,  in  the  world,  has  at  first  an 


254  THEORY. 

trade,  the  School  always  opposes  the  inhabitants  of  the  country 
to  foreigners;  it  borrows  all  its  examples  from  the  special 

aspect  of  great  philanthropy.  That  is  deceptive  ;  it  looks  only  upon  indi 
viduals  as  the  moving  machinery  of  society.  It  does  not  take  any  note  of 
their  joys  or  sorrows,  their  happiness  or  misery.  It  is  a  science  of  wealth 
merely,  and  it  rejects  all  moral  considerations. 

It  appears  to  favor  the  individual  again  when  it  contends  for  individual 
liberty,  and  protests  against  all  interference  with  individual  rights ;  but 
that  is  because  it  regards  such  intervention  as  unwarranted  intermeddling 
with  the  machinery  of  society,  and  an  improper  disturbance  of  the  natural 
course  of  things. 

The  science  does  not,  and  cannot  regard  man  as  a  moral  and  intellectual 
being ;  because  it  professes  only  to  be  the  science  of  wealth.  It  cannot, 
therefore,  embrace  considerations  for  the  moral  and  intellectual  benefit  of 
man ;  for  that  would  be  a  wholly  different  range  of  inquiry.  It  contem 
plates  all  the  individuals  of  the  world  as  working  their  way  through  the 
world,  each  one  by  his  own  instincts,  and  in  his  own  way:  as  civilized  men 
must  live  by  labor,  this  action  of  all  individuals  implies  a  vast  production 
and  exchange  of  commodities.  The  laws  of  this  production  and  exchange 
are  what  constitute  the  science  of  the  School.  It  is  the  operation  of  the 
great  hive  of  industry  which  the  science  studies,  and  upon  this  it  constructs 
its  formulas.  Every  individual  must  be  left  by  the  system  to  his. own  action  ; 
and  this  is  held  to  be  the  greatest  boon  that  ever  was  or  can  be  offered  to 
humanity.  The  great  fallacy  of  this  idea  is  founded  upon  that  ignorance 
of  human  nature  which  is  charged  by  the  School  upon  those  who  are  in 
favor  of  public  intervention.  It  would  give  free  scope  to  individual  activity. 
Let  us  suppose  that  favor  bestowed  upon  a  million  of  individuals  taken 
from  any  civilized  nation.  They  might  set  out  together  in  the  race  of  life, 
but  a  very  short  time  only  would  be  necessary  to  show  that  the  men  of 
talents,  skill,  energy,  enterprise,  vigor,  and  other  natural  advantages,  would 
be  far  in  advance  of  the  rest.  Nine-tenths  of  the  million  would  soon  be  in 
no  condition  to  derive  any  advantage  from  the  liberty  tendered  them  by  the 
science  of  political  economy ;  they  would  be  firmly  fixed  in  their  several 
positions,  and  far  too  poor  to  avail  themselves  of  the  freedom  of  action.  A 
very  large  portion  would  be  hirelings,  depending  on  their  daily  wages  for 
daily  bread ;  and  a  large  number  might  be  slaves  or  serfs.  The  liberty 
secured  by  the  science  would  inure  only  to  one-tenth,  perhaps  not  to  one- 
twentieth  of  the  whole.  The  School  leaves  the  interests  of  these  nine-tenths, 
without  restraint  or  limitation,  in  the  hands  of  the  one-tenth,  consisting 
mainly  of  those  upon  whom,  in  various  ways,  the  nine-tenths  are  dependent 
for  a  living,  for  wages,  for  capital,  or  instruction.  To  offer  the  individuals 
of  a  whole  nation  the  largest  industrial  liberty,  is  neither  boon  nor  advan 
tage  ;  it  is  mere  mockery.  It  is  worse :  it  is  a  liberty  which  inures  only  to 


PRIVATE    AND    NATIONAL    ECONOMY.  255 

relations  of  merchants;  it  always  treats  of  merchandise  in 
general,  without  making  any  distinction  between  agricultural 
and  manufactured  products,  to  show  that  it  is  indifferent  whether 
imports  and  exports  be  of  the  precious  metals,  of  raw  materials,  or 
manufactured  articles,  and  whether  they  are  or  are  not  in  equi 
librium.  If,  for  instance,  frightened  at  the  commercial  revul- 

those  who  already  enjoy  immense  advantages  over  the  masses  of  society ; 
it  is  an  immunity  to  men  of  capital,  talent,  power,  and  special  advantages, 
to  prey  upon  those  less  gifted,  upon  the  bone  and  sinew,  the  real  producers, 
at  their  pleasure.  There  must  be  no  intervention.  The  law  of  demand  and 
supply,  and  open  markets,  must  be  the  sole  regulators.  The  effect  of  this 
•would  doubtless  be  to  make  the  rich  richer,  and  the  poor  poorer.  If  these 
employers  and  capitalists  have  as  many  men  as  they  want,  it  is  a  matter 
of  no  concern  to  them  how  many  men  have  no  employers,  and  are  starving 
for  want  of  labor  and  its  due  reward. 

The  question,  then,  must  arise,  whether  the  government  must  not  inter 
vene,  if  not  between  these  two  classes,  at  least  so  far  as  to  regard  the 
actual  condition  of  the  great  mass  of  laborers,  to  save  them  from  oppres 
sion  ;  to  pursue  such  policy  as  would  be  most  likely  to  secure  labor  to  all ; 
to  protect  them  and  their  employers  from  such  an  influx  of  foreign  products 
as  might,  for  a  time,  deprive  them  at  once  of  labor  and  of  bread. 

This  science  takes  no  account  of  the  differences  in  the  natural  gifts  and 
powers  of  men,  nor  of  the  results  which  these  differences  produce ;  it  does 
not  accommodate  itself  to  circumstances,  and  men  may  perish  by  thou 
sands  under  the  working  of  its  laws,  and  it  remain  entirely  unmoved.  It 
contemplates  no  such  emergency,  and  provides  for  none.  These  laws,  then, 
which  are  founded  wholly  upon  individual  action,  operate  with  terrible 
severity  upon  the  great  multitude  who  labor ;  they  are,  in  fact,  laws  for 
the  advantage  of  the  few  who  direct,  and  against  the  many  who  labor. 

This  fundamental  law  of  the  science  which  regards  the  free  action  of 
individuals  as  the  greatest  stimulant  of  wealth,  is  a  fallacy.  It  could  only 
be  true  if  men  were  equally  endowed  in  all  respects,  and  then  kept  equal 
in  their  positions  and  opportunities.  It  mistakes  human  nature.  The 
largest  production  of  wealth,  as  men  are,  can  only  be  attained  by  that 
public  policy  which  not  only  protects  industry,  but  which  protects  the 
laborers,  either  directly,  where  it  may  be  practicable  or  necessary,  or  indi 
rectly,  by  protecting  the  special  industry  in  which  they  are  employed. 

The  idea  of  promoting  human  happiness  or  advantage  by  regarding  all 
the  individuals  of  the  world  as  free  from  any  national  care  or  restraint  in 
what  concerns  trade,  is  too  absurd  ever  to  have  been  adopted,  but  under 
some  urgent  motive.  It  is  no  doubt  due  to  the  ambition  of  constructing 
the  science  of  wealth.  —  [S.  C.] 


256  THEORY. 

sions  which  scourge  the  States  of  North  America,  like  an 
epidemic,  we  consult  that  theory  as  to  the  means  of  removing 
them  or  diminishing  the  evil,  we  find  neither  consolation  nor 
instruction;  we  can  explain  by  this  science  neither  their  ap 
proach,  their  ravages,  nor  their  departure,  because,  under 
penalty  of  being  reputed  an  obscurantist  or  an  ignoramus,  we 
cannot  even  utter  the  phrase,  "  balance  of  trade,"  although 
it  is  still  freely  employed  in  legislative  halls,  in  all  offices  of 
public  administration,  and  in  all  discussions  about  exchange. 
For  the  welfare  of  mankind,  it  is  made  our  duty  to  believe  that 
exports  and  imports  always  balance,  despite  the  reports  of 
statesmen  or  legislators,  in  which  we  read  how  the  Bank  of 
England  is  obliged  to  uphold  or  assist  the  natural  order  or 
course  of  things,  in  spite  of  the  corn-laws,  which  prevent  agri 
cultural  countries  from  trading  with  England,  and  from  paying 
in  their  own  products  for  the  manufactured  articles  they  consume. 
The  School  admits  no  distinction  between  nations  which  have 
reached  a  superior  degree  of  economical  development,  and  those 
which  yet  occupy  a  lower  scale.  It  excludes  everywhere  the 
interference  of  the  State ;  for  every  individual  must  be  capable 
of  production  in  proportion  as  government  leaves  him  to  his  own 
resources.  If  that  doctrine  be  true,  the  most  active  and  the 
richest  producers  of  the  globe  should  be  the  savages,  for  nowhere 
is  individual  liberty  greater,  nowhere  is  the  intervention  of 
government  less  than  in  the  savage  state.* 

*  The  economists  of  the  highest  authority  in  England  and  on  the  conti- 
tinent,  whatever  may  be  their  special  opinions  on  the  subject  of  interna 
tional  trade,  are  far  from  professing  the  doctrine  of  abstinence  on  the  part 
of  government  in  what  pertains  to  industry. 

A  veteran  in  this  science,  (McCulloch,)  in  the  last  edition  of  his  Princi 
ples,  &c.,  combats  with  energy  the  opinion  that  in  what  concerns  the  pro 
duction  of  wealth,  the  duties  of  government  must  be  purely  negative,  and 
be  restricted  to  the  guarantee  or  safety  of  property  and  the  liberty  of  labor. 
The  duties  of  government  appear  to  him  much  more  extended.  After  an 
attempt  to  define  them  in  an  important  Chapter,  (X.,  Part  I.,)  he  sums  up 
his  opinions  in  these  words  : — 

"  The  maxim,  pas  trap  gouverner,  should  never  be  absent  from  the  recol 
lection  of  legislators  and  ministers.  Whenever  they  set  about  regulating, 


PRIVATE    AND    NATIONAL    ECONOMY.  257 

Statistics  and  history  teach,  on  the  contrary,  that  the  action 
of  legislative  and  administrative  power  becomes  everywhere  more 

they  are  treading  a  path  encompassed  by  difficulties ;  and  while  they  ad 
vance  with  caution,  they  should  be  ready  to  stop  the  moment  they  do  not 
see  the  way  clearly  before  them,  and  are  not  impelled,  by  a  strong  sense 
of  public  duty,  to  go  forward.  But,  so  long  as  this  is  the  case,  they  should 
never  hesitate  in  their  course.  There  are  many  cases  in  which  government 
must,  and  many  more  in  which  it  should,  interfere.  And  it  is  the  duty  of 
the  legislature,  having  once  fully  satisfied  itself,  by  a  careful  inquiry,  of 
the  expediency,  all  things  considered,  of  any  measure,  resolutely  to  carry 
it  into  effect." 

J.  Stuart  Mill,  in  his  recent  treatise,  regards  the  question  from  the  same 
point  of  view,  and  devotes  a  considerable  part  of  his  work  to  define  the 
duties  of  government  with  reference  to  industry. 

The  opinions  of  men,  among  us,  who  are  the  official  interpreters  of  poli 
tical  economy,  are  well  known ;  —  Michael  Chevalier,  in  the  College  of 
France ;  Messrs.  Blanqui  and  Wolowski,  in  the  Conservatory  of  Arts  and 
Trades.  In  the  lecture  at  the  opening  of  his  Course  in  1850,  Chevalier 
took  a  position  on  this  subject  which  may  be  regarded  as  a  wise  medium 
between  those  who  have  recently  exaggerated  the  necessity  of  government 
intervention  and  those  who  have  reproduced,  with  nerve  and  talent,  the 
let  alone  theory  of  the  last  century.  "  One  of  the  gravest  errors  of  the 
modern  doctrine,  now  widely  diffused,  is  in  the  systematic  preponderance 
given  to  the  intervention  of  the  state.  These  doctrines  spring  from  a  false 
notion  of  human  nature,  for  they  overlook  the  power  of  individual  resource. 
They  would  lead  to  an  intolerable  tyranny,  of  which  the  yoke  would  be 
debasing.  I  believe  this  ;  I  teach  it.  But,  on  the  other  hand,  I  think  that 
a  doctrine  which  would  rest  everything  exclusively  on  personal  interests, 
which  would  refuse  all  intervention  of  authority,  and  reduce  government 
to  the  position  of  a  keeper  of  the  peace  or  an  officer  of  police,  would  bo 
equally  in  error,  and  equally  impracticable."  —  [H.  R.] 

McCulloch,  Chevalier,  and  Stuart  Mill,  are  certainly  very  distinguished 
disciples  of  Smith  and  Say,  and  very  high  authorities  in  the  School  of 
political  economy,  founded  by  those  departed  economists.  The  concessions 
here  quoted  are  very  remarkable,  and  are  undoubtedly  made  under  the 
reacting  power  of  truth  and  common  sense.  Their  effect  is,  however,  to 
modify  very  greatly  the  system  of  Say,  on  which,  in  fact,  the  School  has 
built  its  authority  and  success.  The  process  of  disintegration  has  com 
menced,  and  will  not  cease  until  the  School,  its  popularity  and  opinions, 
shall  belong  to  the  history  of  the  past.  In  the  first  announcement  of  this 
system,  nothing  was  more  insisted  upon  than  the  non-intervention  of  govern 
ment  and  individual  liberty.  These  were  necessary  to  give  the  new  science 
fair  play.  The  subject  of  the  science  was  the  production,  distribution,  and 

IT 


258  THEORY. 

necessary  in  proportion  as  the  national  economy  is  developed. 
As  individual  liberty  is  generally  desirable  only  so  far  as  it  is 

consumption  of  wealth.  The  science  could  assume  that  the  natural  wants 
of  men  would  compel  them  to  labor ;  that  this  labor  would  produce  wealth  ; 
that  this  wealth  must  be  distributed ;  that  the  distribution  would  be  effected 
by  free  trade,  according  to  the  industry  and  wants  of  all  people,  under  the 
operation  of  supply  and  demand,  and  the  theory  of  markets.  The  science 
depended  upon  the  habits  and  instincts  of  man,  a  producing  and  exchanging 
animal,  to  make  its  theory  good.  But  that  these  habits  and  instincts  should 
operate  fairly,  and  justify  the  doctrine,  they  must  be  let  alone  to  exhibit 
their  doings  in  the  natural  order  of  things.  The  nation  must  not  interpose 
any  policy  of  its  own,  nor  enforce  any  restriction  or  regulation ;  it  must 
not  attempt  to  relieve  or  furnish  employment  to  those  who  suffer  for  want 
of  work ;  all  individuals  must  be  free  within  the  entire  scope  of  practical 
political  economy.  Any  intervention  on  the  part  of  government  would  be 
a  disturbance  of  the  natural  order  or  course  of  things.  The  science  had 
assumed  what  individuals,  under  the  pressure  of  their  natural  and  factitious 
wants,  would  do ;  but  how  could  the  science  anticipate  what  the  movements 
of  a  despot  or  the  action  of  a  government  might  be  ?  These  sources  of  action 
had  neither  natural  instincts  nor  settled  habits  upon  which  to  found  the 
laws  of  a  science.  If  the  science  should  permit  itself  to  be  drawn  into 
the  regions  of  mere  common  sense,  of  sound  discretion,  of  administrative 
skill  or  cunning,  or  despotic  or  legislative  caprice,  it  must  necessarily  expire. 
The  business  of  governing,  in  reference  to  the  interests  of  industry  and 
trade,  had  hitherto  been  carried  on  mainly  without  any  aid  from  political 
economy,  under  some  of  the  influences  just  mentioned,  and  are  far  too 
various  and  capricious  to  be  reducible  into  the  formula  of  a  science.  And 
yet  the  great  lights  of  the  science  above  named  have,  by  the  concessions 
just  referred  to,  deserted  the  great  arena  of  the  science,  the  free  acting 
habits  and  instincts  of  all  the  individuals  of  the  world,  and  have  permitted 
themselves  to  be  drawn  into  the  region  of  national  policy,  sound  discretion, 
common  sense,  legislative  caprice,  or  despotic  authority.  So  far  as  these 
operate,  the  science  is  gone ;  for  it  is  no  science  of  national  policy.  It  is 
clear  to  our  apprehension  that  the  lights  of  the  science  above  named  have 
opened  a  door  which  will  admit  enemies  the  School  can  never  again  thrust 
out  or  overcome.  There  are  yet  many  devotees  of  the  science  who  main 
tain  an  uncompromising  hostility  to  all  such  fatal  concessions.  -In  the 
number  for  August  1855,  of  the  Journal  des  Economistes,  which  is  the  great 
organ  of  the  disciples  of  Say,  an  article  on  this  subject  commences  thus : — 
"  The  individual  is  the  substance  of  society,  and  society  has  no  other  obli 
gation,  as  it  has  no  other  object,  than  the  security  of  the  individual ;  it 
owes  to  no  one  anything  but  liberty.  It  can  assure  justice  to  all ;  it  can 
offer  nothing  but  justice  to  any  one.  Every  system  which  pretends  to  givo 


PRIVATE    AND    NATIONAL    ECONOMY.  259 

not  inconsistent  with  with  the  public  good ;  so  private  industry 
can  reasonably  claim  an  unrestrained  liberty  of  action,  only  to 

more  than  liberty,  attacks  liberty.  Every  measure  which  passes  the  defence 
of  individual  rights,  overlooks  the  rights  of  individuals."  These  principles 
condemn,  in  the  name  of  morals,  and  in  the  name  of  utility,  every  inter 
vention  in  the  movement  of  individual  activity."  This  is  the  very  spirit 
and  the  true  ground  of  the  science.  If  this  be  given  up,  where  is  the 
stopping-place  ?  If  government  be  allowed  to  intervene  at  all,  it  must  be 
upon  the  ground  of  public  or  private  good,  and  these  exceptions  coyer  the 
whole  ground  of  industry  and  trade.  When  government  becomes  the  judge 
of  what  is  to  be  done  for  the  interests  of  the  men  who  labor  and  the  men 
who  trade,  the  science  of  the  School  will  be  at  an  end. 

It  may  be  asked,  in  all  earnestness,  in  whose  hands  the  mass  of  men  in 
any  nation  would  be  safest ;  in  the  hands  of  the  masters,  employers,  traders, 
capitalists,  men  of  enterprise,  of  talents  and  of  energy,  all  pursuing  their 
separate  interests,  and  operating  upon  the  necessities  of  the  multitudes, 
upon  their  helplessness,  their  want  of  prudence  and  of  intelligence ;  or  in 
the  hands  of  government  ?  The  government  is  certainly  more  disinterested 
in  what  concerns  the  welfare  of  the  masses,  than  the  men  who  are  directly 
engaged  in  appropriating  the  proceeds  of  their  labor.  But  these  leading 
men,  each  one  acting  for  himself,  and  fully  occupied  with  his  own  concerns, 
even  if  they  were  ever  so  well  inclined  to  favor  the  masses,  are  not  in  a 
position  to  see  or  understand  the  condition  of  all,  or  the  wants  of  all ;  nor 
have  they  power  enough  to  provide  any  remedy,  or  cure  any  evil.  The 
government  alone  can  survey  the  whole  field  of  national  industry,  and 
ascertain  the  condition  of  all  the  laborers  —  how  many  are  suffering  for 
want  of  labor,  how  many  from  indisposition  to  labor,  how  many  from  the 
influx  of  foreign  products,  how  many  from  want  of  instruction,  and  the 
want  of  knowing  the  latest  improvements  in  their  various  departments, 
and  how  many  from  other  causes ;  it  alone  can  weigh  all  these  circum 
stances,  and  devise  the  policy  which  would  best  promote  the  interest  of  all, 
or  apply  the  remedy  which  might  best  meet  special  cases.  Can  a  govern 
ment  have  a  more  worthy  object  of  effort  for  all  its  skill  and  intelligence 
than  the  welfare  of  those  masses  which  make  up  the  body  of  the  nation, 
upon  which  the  nation  is  mainly  dependent  for  its  food  and  for  its  defence  ? 
The  mind  of  the  nation  may  reside  elsewhere,  but  in  these  masses  are  its 
bones  and  sinews,  its  blood  and  muscles.  Shall  the  nation,  as  such,  have 
no  care  of  these  ?  Shall  disease  invade,  and  accidents  impair,  the  efficiency 
of  these  portions  of  the  body  politic,  and  no  remedy  be  thought  of  or  ap 
plied?  Shall  pain  and  suffering  come  upon  them,  and  no  effort  be  made 
for  alleviation  ?  The  position  of  a  government  restricted  to  non-interven 
tion,  in  such  and  all  similar  cases,  would  be  pitiable  indeed ;  it  may  be 
compared  to  the  spectators  round  the  ring  of  a  prize-fight ;  they  must  look 


260  THEORY. 

the  extent  that  such  action  is  consistent  with  the  general  pros 
perity  of  a  nation.  But  if  this  free  action  of  individuals  is  use- 
on  and  see  the  fight  out,  only  securing  fair  play  ;  that  is  justice  and  liberty 
of  action  to  all  the  combatants ;  let  who  may  win,  let  the  extremity  of 
Buffering  be  what  it  may,  the  spectator  must  refrain ;  that  is  the  law  of 
battle.  So  in  the  great  arena  of  industry,  where  all  the  selfish  passions  of 
men  have  full  play,  where  cunning,  skill,  intelligence,  caution,  wisdom, 
courage,  goodness  and  wealth,  are  in  struggle  with  their  opposites,  where 
innumerable  mischances  may  befall  the  parties  which  they  can  neither 
repair  nor  remedy ;  where  one  party  has  all  the  artillery,  and  the  others 
only  their  hands  ;  where  the  interests  of  all  are  susceptible  of  being  blended 
in  perfect  harmony ;  yet  where  discord  rages  for  want  of  a  regulator  to 
watch  over  them,  for  want  of  such  restrictions  and  restraints  as  would  not 
only  keep  all  within  due  bounds,  but  prevent  such  interference  from  with 
out  as  might  create  confusion  or  increase  disorder,  — the  government  must 
not  intervene,  let  the  suffering  of  either  party  be  ever  so  great,  or  the 
occasion  be  ever  so  pressing.  Such  is  the  science  of  the  School.  It  cannot 
endure  even  any  public  intervention  for  the  poor,  under  any  circumstances. 
It  is  utterly  contrary  to  its  doctrine  to  take  from  the  rich,  by  way  of  tax, 
and  give  to  the  poor.  The  latter  have  fallen  in  the  struggle,  but  it  is  not 
just  that  the  victors  should  be  called  upon  to  dress  the  wounds  of  the  de 
feated,  or  to  feed  or  clothe  them. 

Was  any  government  ever  reduced  to  so  despicable  a  condition  ?  Could 
that  be,  in  any  proper  sense,  called  a  government,  which  would  submit  to 
have  its  hands  so  tied  ?  Does  not  every  government  repress  all  improper 
movements  of  the  working  classes  to  gain  undue  advantages  ?  Does  it  not 
regulate  the  rate  of  interest  and  check  the  efforts  of  speculators  ?  Does  it 
not  watch  over  the  weights  and  measures  of  sellers  ?  Does  it  not  prescribe 
the  rates  of  tolls,  ferriages,  and  the  freights  on  railways  and  canals ;  the 
inspection  of  many  articles  of  trade,  and  the  manner  in  which  they  must 
be  prepared  for  market ;  the  registry  and  sale  of  vessels,  with  many  re 
straints  and  many  requirements;  the  inspection  of  steamers,  with  their 
engines;  regulate  the  trade  in  powder  and  spirituous  liquors;  grant  or 
refuse  licences  to  brokers  and  traders  in  particular  ways  and  places ;  re 
gulate  the  coinage  of  money ;  the  whole  business  of  banking ;  the  form  of 
promissory  notes,  and  the  liabilities  of  parties  to  them ;  the  business  of 
insurance  ;  the  whole  proceedings  in  cases  of  insolvency?  But  why  attempt 
to  enumerate  the  cases  in  which  government  intervenes  necessarily  in  the 
business  of  individuals ;  restraining,  directing,  forbidding,  guiding,  assist 
ing,  and  protecting?  No  government  could  exist  one  year  in  which  such 
powers  were  not  exercised.  Now,  it  is  true  enough  that  the  School  may 
not  contemplate  the  withdrawal  from  government  of  such  powers ;  but  the 
School  has  never  drawn  the  line  showing  where  the  government  may  go, 


PRIVATE    AND    NATIONAL    ECONOMY.  261 

less  or  positively  hurtful  to  the  public,  the  nation  has  the  right 
to  turn  this  lost  industry,  this  wasted  power,  to  the  support  of 
the  collective  power  of  the  country ;  or  at  least  those  concerned 
or  engaged  in  this  ill-directed  industry  should,  for  the  sake  of 
their  own  best  interests,  submit  to  such  public  regulations  as 
would  enure  to  their  own  benefit  as  well  as  the  public  advantage. 
In  representing  free  competition  of  producers  as  the  surest 
means  for  developing  the  prosperity  of  mankind,  the  School  is 
perfectly  right,  considering  the  point  of  view  from  which  it 
regards  the  subject.  In  the  hypothesis  of  universal  association, 
every  restriction  upon  honest  trade  between  different  countries 
would  seem  unreasonable  and  injurious.  But  as  long  as  some 
nations  will  persist  in  regarding  their  special  interests  as  of 
greater  value  to  them  than  the  collective  interests  of  humanity, 
it  must  be  folly  to  speak  of  unrestricted  competition  between 
individuals  of  different  nations.  The  arguments  of  the  School 
in  favor  of  such  competition  are  then  applicable  only  to  the 
relations  between  inhabitants  of  the  same  country.  A  great 
nation  must  consequently  endeavor  to  form  a  complete  whole, 
which  may  maintain  relations  with  other  similar  unities  within 
the  limits  which  its  particular  interest  as  a  society  may  prescribe ; 
now  these  social  interests  are  known  to  differ  immensely  from 
the  private  interests  of  all  the  individuals  of  a  nation,  if  each 
individual  be  taken  separately  and  not  as  a  member  of  the 
national  association,  if,  as  with  Smith  and  Say,  individuals  are 
regarded  merely  as  producers  and  consumers,  and  not  as  citizens 
of  a  nation.  In  that  character  the  individuals  feel  no  anxiety 
for  the  happiness  of  future  generations ;  they  regard  it  as  absurd, 
having  been  so  demonstrated  by  Cooper,  to  make  positive  sacri 
fices  of  present  enjoyments  for  the  purpose  of  gaining  uncertain 

and  beyond  which  it  must  not  pass,  in  regulating  the  industry  of  indivi 
duals.  It  cannot  draw  any  such  line,  because  its  own  logic  sweeps  away 
all  intervention.  It  has  attempted  to  avoid  the  difficulty  by  simply  severing 
all  connection  between  politics  and  political  economy.  It  requires  govern 
ments  to  confine  themselves  to  politics,  which  it  does  not  define,  and  not  to 
violate  any  of  the  laws  of  political  economy,  which  it  does  define.  It  per 
mits  governments  to  exercise  such  powers  as  are  left  to  it,  the  domain  of 
political  economy  not  being  entered  nor  invaded.  —  [S.  C.] 


262  THEORY. 

benefits.  However  precious  in  the  vast  and  far-distant  regions 
of  the  future,  the  duration  of  a  nation  is  of  little  importance  to 
them:  they  ahandon  the  vessels  of  their  merchants  to  the 
audacity  of  pirates ;  they  care  little  for  the  power,  the  honor, 
and  the  glory  of  their  country ;  at  the  utmost  they  may  submit 
to  some  material  sacrifices  to  bring  up  their  children  and  to 
place  them  in  such  an  apprenticeship  as  will  give  them  a  trade 
by  which  they  may  eventually  be  enabled  to  earn  their  own 

bread. 

The  prevailing  theory  of  political  economy,  in  fact,  bears  such 
resemblance  to  private  economy,  that  J.  B.  Say,  when,  by  way 
of  exception,  he  permits  the  State  to  protect  national  industry, 
makes  it  a  condition  that  there  shall  be  some  prospect,  that  after 
a  few  years  it  shall  be  able  to  live  without  public  aid :  he  treats 
national  industry  as  a  shoemaker's  apprentice,  to  whom  a  few 
years'  teaching  and  support  is  accorded  that  he  may  learn  his 
trade  to  live  without  further  help  from  his  parents. 


CHAPTER  V. 
NATIONALITY  AND  THE  ECONOMY  OF  A  NATION. 

THE  system  of  the  School,  as  we  have  shown  in  the  preceding 
chapters,  presents  three  essential  defects ;  firstly,  a  chimerical 
cosmopolitism,  which  does  not  comprehend  nationality,  and  which 
has  no  regard  for  national  interests ;  secondly,  a  dead  materialism, 
which  regards  everywhere  the  exchangeable  value  of  things, 
taking  account  neither  of  the  moral  nor  of  the  political  in 
terests  of  the  present  nor  of  the  future,  nor  of  the  productive 
power  of  the  nation ;  thirdly,  a  separatism,  a  disorganizing 
individualism",  which  disregarding  the  nature  of  social  labor 
and  the  working  of  associative  power  towards  its  highest  results, 
merely  describes  or  depicts  individual  industry,  as  it  would 
develop  itself  if  unrestrained  in  society,  that  is  with  the  whole 
human  family,  were  it  not  separated  into  different  nations. 


NATIONALITY    AND    ECONOMY.  263 

But  between  the  individual  and  the  whole  human  race  there 
is  the  nation  with  its  special  language  and  literature,  with  its 
own  origin  and  history,  with  its  manners  and  habits,  its  laws 
and  institutions ;  with  its  claims  to  existence,  its  independence, 
its  progress,  its  duration,  and  with  its  distinct  territory;  an 
association  having  not  only  an  entirely  separate  existence,  but 
having  an  intelligence  and  interest  peculiarly  its  own,  a  whole 
existing  for  itself,  acknowledging  within  itself  the  authority  of 
the  law,  but  claiming  and  enjoying  full  exemption  from  the 
control  of  other  similar  associations,  and  consequently  in  the 
actual  state  of  the  world,  able  to  maintain  its  independence  v/ 
only  by  its  own  strength  and  proper  resources.  As  an  indivi 
dual  acquires  chiefly  by  the  aid  of  the  nation  and  in  the  bosom 
of  the  nation,  intellectual  culture,  productive  power,  security, 
and  well-being,  human  civilization  can  only  be  conceived  as 
possible  by  means  of  the  civilization  and  development  of  nations. 

There  are,  moreover,  enormous  differences  between  nations ; 
we  find  among  them  giants  and  dwarfs,  well-constituted  bodies 
and  abortions,  civilized,  half-civilized,  and  barbarous  nations. 
But  all  these,  as  well  as  all  individuals,  have  received  from 
nature  an  instinct  of  preservation,  and  a  desire  of  progress.  It 
is  the  mission  of  political  institutions  to  civilize  barbarian  nation 
alities,  to  enlarge  those  which  are  small,  to  strengthen  those 
which  are  weak,  and,  above  all,  to  secure  their  existence  and 
their  duration.  The  mission  of  political  economy  is  to  furnish 
the  economical  education  of  the  nation,  and  to  prepare  it  to  take 
its  proper  place  in  the  universal  association  of  the  future. 

A  normal  nation  possesses  a  language  and  a  literature  of  its 
own,  a  territory  of  considerable  extent,  proper  proportions,  and 
numerous  resources ;  a  large  population,  an  agriculture,  a  manu 
facturing  industry,  a  commerce  and  navigation  harmoniously 
developed ;  the  arts  and  sciences,  the  means  of  instruction  and 
general  culture,  being  at  the  level  of  the  material  production. 
Its  political  constitution,  its  laws  and  institutions,  assure  its 
citizens  a  high  degree  of  security  and  liberty ;  its  religious  senti 
ment  being  maintained,  morality  and  comfort  soon  prevail  among 
the  whole  population.  Such  a  nation  possesses  power,  by  land 


264  THEORY. 

and  sea,  sufficient  to  maintain  its  independence,  and  to  protect 
its  external  trade.  It  exercises  an  influence  on  the  development 
of  nations  in  a  less  degree  of  advancement,  and  with  the  surplus 
of  its  population  and  capital,  both  intellectual  and  material,  it 
plants  colonies,  and  founds  new  nations. 

A  considerable  population,  and  a  vast  territory,  with  varied 
resources,  are  essential  elements  of  normal  nationality,  funda 
mental  conditions  of  moral  culture,  as  well  as  of  material  devel 
opment  and  political  power.  A  nation  limited  in  its  population 
and  territory,  especially  if  it  has  a  distinct  language  of  its  own, 
have  but  a  dwarfed  literature,  and  dwarfed  institutions  for  the 
encouragement  of  science  and  art.  A  small  state  can  never, 
within  the  limits  of  its  territory,  carry  to  attainable  perfection 
the  different  branches  of  labor.  Any  protection  there,  consti 
tutes  private  monopoly.  It  is  only  by  treaties  with  more 
powerful  nations,  by  sacrificing  a  portion  of  the  advantages 
of  nationality,  and  by  making  extraordinary  exertions,  that  it  is 
able  to  maintain  successfully  its  existence. 

A  nation  without  sea-coast,  without  ships,  without  power  over 
the  mouths  of  its  rivers,  is  dependent  on  others  for  its  external 
commerce ;  it  is  unable  to  establish  colonies,  or  to  found  new 
nations ;  the  surplus  of  its  population,  of  its  moral  and  material 
resources,  which  is  diffused  into  countries  still  uncultivated,  is 
wholly  lost  to  its  civilization,  to  its  industry,  and  yields  all  its 
advantages  to  other  nations. 

A  nation,  the  territory  of  which  is  not  limited  by  seas,  nor  by 
chains  of  mountains,  is  exposed  to  attacks  from  without,  and  can 
only,  by  great  sacrifices,  and  at  best  in  a  very  imperfect  manner, 
establish  a  system  of  impost  duties. 

Territorial  imperfections  are  corrected,  either  by  the  blending 
of  thrones,  as  in  the  case  of  England  and  Scotland,  or  by  pur 
chase,  as  in  that  of  Florida  and  Louisiana;  or,  finally,  by 
conquest,  as  in  that  of  Ireland  by  Great  Britain. 

Recently  recourse  has  been  had  to  another  means  of  consoli 
dating  territory  in  a  way  more  conformable  to  justice,  as  well 
as  to  national  welfare,  and  not  depending  upon  the  chance  of  a 


I 

NATIONALITY    AND    ECONOMY.  265 

blended  succession ;  that  is,  by  association  of  the  interests  of 
States  under  treaties  mutually  arranged. 

It  is  by  their  Customs-Union  that  the  German  nations  now  enjoy 
one  of  the  most  important  attributes  of  nationality.  That  in 
stitution,  however,  must  not  be  treated  as  perfect,  so  long  as  it 
does  not  extend  to  the  whole  sea-coast,  from  the  mouth  of  the 
Rhine  to  the  frontiers  of  Poland,  including  Holland  and  Den 
mark.  A  natural  consequence  of  that  union  is  the  admission 
of  these  two  countries  into  the  German  confederation,  and  of 
course,  into  the  German  nationality,  which  would  thus  obtain  all 
it  wants  at  present ;  that  is,  fisheries,  naval  power,  with  mari 
time  and  colonial  commerce.  These  two  nations  belong,  besides, 
by  their  origin  and  by  their  whole  history,  to  the  German  nation 
ality.  The  debt  which  so  greatly  oppresses  them,  is  the  result 
of  a  series  of  excessive  exertions  to  maintain  their  independence, 
and  it  is  in  the  nature  of  things  that  the  evil  should  reach  a 
point  where  it  may  be  intolerable,  and  when  their  incorporation 
into  a  greater  nationality  will  appear  as  acceptable  as  it  will  be 
necessary. 

Belgium  needs  to  be  associated  with  a  more  powerful  neighbor 
as  a  remedy  for  the  inconveniences  of  her  small  territory  and 
population.  The  American  Union  and  Canada,  in  proportion 
as  their  population  increase,  will  be  drawn  to  each  other,  and 
England  will  soon  be  powerless  to  prevent  their  union. 

In  reference  to  political  economy,  nations  have  to  pass  through 
the  following  stages  of  development:  —  The  savage  state,  the 
pastoral  state,  the  merely  agricultural  state,  and  the  state  at 
once  agricultural,  manufacturing,  and  commercial.  The  history 
of  industry  in  England  exhibits  more  clearly  than  any  other  the 
transition  from  the  savage  to  the  pastoral  state,  from  the  rearing 
of  cattle  to  agriculture,  and  from  agriculture  to  the  first  at 
tempts  in  manufacture  and  navigation ;  it  shows  also,  that  this 
transition  is  favored  and  expedited  by  free  trade  with  free  cities 
and  more  advanced  nations ;  and  that  a  prosperous  manufac 
turing  industry,  a  considerable  marine,  and  a  vast  external  com 
merce,  can  only  be  acquired  by  the  intervention  and  aid  of 
government. 


266  THEORY. 

The  less  agriculture  has  advanced,  the  more  external  trade 
has  had  to  do  in  exchanging  the  surplus  of  agricultural  products 
and  raw  materials  of  the  country  for  articles  manufactured 
abroad ;  the  deeper  a  nation  is  plunged  in  barbarism,  the  more 
it  requires  the  regimen  of  absolute  monarchy,  the  more  free 
trade,  that  is,  the  export  of  agricultural  products  and  the  import 
of  manufactured  products,  concurs  in  its  prosperity  and 
civilization. 

On  the  contrary,  when  agriculture  and  other  useful  arts  have 
been  well  developed  among  a  people,  and  when  their  social  and 
political  condition  have  been  improved,  less  advantage  can 
be  derived  from  the  exchange  of  agricultural  products  and 
raw  materials  for  foreign  manufactured  articles;  and  com 
petition  with  more  advanced  manufacturing  nations  will  prove 
-^injurious. 

It  is  only  in  similar  nations,  that  is,  in  those  possessing  all 
the  qualities,  all  the  moral  and  material  resources  required  to 
establish  a  home  manufacturing  industry,  and  to  reach  thus  the 
highest  degree  of  civilization,  prosperity,  political  power, 
subject,  however,  to  injury  from  competition  with  foreign  in 
dustry,  already  well  advanced,  that  commercial  restrictions  for 
-  the  purpose  of  creating  and  sustaining  a  manufacturing  industry, 
can  be  legitimate  and  successful;  they  are  so  only  until  that 
industry  becomes  strong  enough  not  any  longer  to  fear  foreign 
competition;  and  they  are  legitimate  within  that  interval, 
only  in  the  necessary  degree  to  protect  that  industry  in  its 
foundations. 

The  protective  system  would  be  contrary  to  cosmopolite 
economy,  and  also  to  the  admitted  interests  of  the  nation,  if  it 
should  completely  and  suddenly  exclude  foreign  competition,  and 
thus  isolate  the  nation  from  the  rest  of  the  world. 

When  manufacturing  industry  is  still  in  the  first  stage  of  its 
development,  protective  duties  should  be  very  moderate ;  they 
should  be  raised  by  degrees  in  proportion  as  intellectual  and 
material  capital,  skill  in  the  arts,  and  the  spirit  of  enterprise, 
increase  in  the  country.  But  it  is  not  necessary  that  all  branches 
of  industry  be  equally  protected.  The  most  important,  those  of 


NATIONALITY    AND    ECONOMY.  267 

which  the  development  requires  large  capital,  fixed  and  circu 
lating,  much  machinery,  consequently,  great  knowledge,  much 
dexterity  and  experience,  and  a  vast  body  of  laborers,  whose 
products  are  to  be  classed  among  the  chief  necessaries  of  life, 
having  as  such,  of  course,  considerable  importance,  not  only  in 
reference  to  their  total  value,  but  in  reference  to  the  indepen- 
dence  of  the  country,  as  the  manufactures  of  wool,  cotton, 
and  flax,  such  only  should  have  the  privilege  of  special  protec 
tion.*  When  these  are  suitably  appreciated  and  developed, 
other  branches  of  less  importance  grow  up  round  them,  even 
with  less  protection.  Where  wages  are  high  and  population  not 
considerable,  relatively  to  the  extent  of  territory,  as  in  the  case 
of  the  United  States,  the  interest  of  the  nation  demands  less 
protection  for  manufactures  not  using  much  machinery,  than  for 
such  as  employ  machinery  in  the  greatest  part  of  their  work, 
provided  that  the  states  from  which  they  receive  their  manufac 
tured  articles  take  freely  in  return  their  agricultural  products. 

The  School  mistakes  completely  the  nature  of  economical 
relations  between  nations,  in  supposing  that  the  exchange  of 
agricultural  products  for  manufactured  products  is  just  as  useful 
to  the  civilization,  prosperity,  and  generally  to  the  social  pro 
gress  of  such  nations,  as  the  establishment  in  their  own  territory 
of  manufacturing  industry. 

A  purely  agricultural  nation  cannot  develop  to  a  high  degree 
its  home  and  foreign  trade ;  its  communications,  its  shipping ; 
it  cannot  increase  its  prosperity  as  its  population  increases ;  it 
cannot  make  sensible  progress  in  its  moral,  intellectual,  social, 
and  political  culture ;  it  cannot  acquire  great  political  power ; 
it  cannot  exercise  any  important  influence  over  the  civilization 
and  progress  of  less  advanced  nations ;  nor  can  it  found  colonies  ; 
a  purely  agricultural  state  is  very  far,  in  point  of  national 
advancement,  behind  a  nation  at  once  agricultural  and  manufac 
turing.  Economically  and  politically,  the  former  is  always 

*  Every  country  would,  of  course,  make  out  its  own  list  of  articles,  the 
manufacture  of  which  is  necessary  to  its  independence.  England  protected 
all  her  manufactures ;  and  that  of  iron  has  proved  to  be  one  of  the  most 
important  in  every  respect.  —  [S.  C.] 


268  THEORY. 

/Dependent  more  or  less  upon  those  foreign  nations  which  receive 
its  agricultural  products  in  exchange  for  manufactured  articles. 
It  cannot  determine  of  itself  the  extent  of  its  production  that 
depends  upon  the  wants  of  the  purchasers  abroad.  Buyers  may 
come  from  nations  both  agricultural  and  manufacturing,  in  which 
immense  quantities  of  raw  materials  and  food  are  produced,  and 
they  purchase  and  import  from  abroad  only  the  amount  of  their 
accidental  deficiencies.  Thus  there  is  dependence  upon  the 
results  of  foreign  harvests,  and  upon  contingencies  of  crops  more 
or  less  abundant  in  agricultural  and  manufacturing  nations; 
moreover,  this  is  competition  with  other  agricultural  nations,  so 
that  a  market  already  very  uncertain  becomes  still  more  unre 
liable.  Finally,  trade  with  manufacturing  nations  is  subject  to 
«  interruption  by  war  or  commercial  regulations,  and  then  comes 
the  double  inconvenience  of  finding  no  buyers  for  an  agricultu 
ral  surplus,  and  deprivation  of  manufactured  articles  in  common 
use.  A  purely  agricultural  nation,  as  we  have  said  above,  is 
like  an  individual  who,  wanting  an  arm,  employs  the  arm  of 
another,  the  use  of  which,  however,  he  is  not  always  sure  of 
obtaining;  a  nation,  both  agricultural  and  manufacturing,  is 
like  an  individual  in  full  possession  and  use  of  his  own  two  arras. 

A  fundamental  error  of  the  School  is  its  regarding  the  pro 
tective  system  as  a  spurious  conception  of  speculative  politicians. 
History  attests  that  this  policy  of  protection  had  its  origin  either 
in  the  natural  struggle  of  people  towards  prosperity,  indepen 
dence,  and  power ;  in  war,  or  in  the  hostile  measures  of  powerful 
manufacturing  nations. 

The  idea  of  independence  and  power  grows  with  the  nation ; 
the  School  takes  no  account  of  this  fact;  the  object  of  its 
researches  being,  not  the  economy  of  nations,  but  the  economy 
of  society  at  large  ;  that  is,  of  the  whole  human  family.  If  we 
imagine  an  universal  confederacy  of  nations,  we  no  longer  find 
sufficient  motive  for  exertion  to  promote  the  independence  and 
power  of  each  of  them.  The  guarantee  of  their  independence 
rests  in  the  legal  constitution  of  universal  society,  just  as,  for 
instance,  the  guarantee  of  the  independence  of  the  States  of 
Rhode  Island  and  Delaware,  resides  in  the  Union  of  the  American 


NATIONALITY    AND    ECONOMY.  269 

States.  From  the  origin  of  that  Union,  those  little  States  never 
thought  of  increasing  their  political  power,  nor  even  regarded 
their  independence  as  less  than  that  of  the  large  States  with 
which  they  are  united. 

However  conformable  to  reason  this  idea  of  an  universal  con 
federacy  of  nations,  it  would  be  folly  in  a  country  to  shape 
its  policy  with  a  view  to  realize  such  an  association,  and  a 
perpetual  peace,  as  if  such  facts  were  possible.  Would  not 
every  prudent  man  denounce  as  insane  the  rulers  who,  trusting 
in  the  blessings  of  perpetual  peace,  should  disband  their  armies, 
destroy  their  navies,  and  raze  to  the  ground  their  fortresses  ? 
Rulers  doing  so  would,  however,  merely  comply  with  the  claims 
which  the  School  makes  upon  all  nations  by  inviting  them,  on 
the  faith  of  the  advantages  of  free  trade,  to  renounce  the 
benefits  of  protection. 

War  has  a  destructive  effect  upon  the  trade  between  nation 
and  nation.  War  violently  separates  the  agriculturists  of  one  J 
nation  from  the  manufacturers  of  another; — whilst  the  latter, 
especially  if  inhabiting  a  navigating  and  commercial  country  of 
great  power  and  resources,  readily  obtain  their  supplies  from  the 
farmers  of  their  own  country,  or  from  those  of  other  countries, 
to  which  the  sea  gives  them  access.  The  inhabitants  of  an 
agricultural  country  suffer  doubly  by  this  disturbance  of  com 
mercial  relations.  They  lose  the  market  for  their  special  pro 
ductions,  and  consequently  the  means  of  paying  for  the  manu 
factured  articles  which  commerce  has  made  a  necessity  of  life. 
They  are  thus  restricted,  both  in  their  production,  and  in  their 
consumption. 

When  an  agricultural  nation,  restrained  by  war  in  its  pro 
duction  and  consumption,  has  already  a  considerable  population, 
with  a  civilization  and  an  agriculture  sufficiently  developed, 
the  interruption  of  trade  thus  produced  gives  birth,  at  once, 
to  manufacturing  industry.  War  operates  like  a  system  of 
prohibition. 

A  nation  thus  situated  learns  at  once  the  immense  advantage 
of  manufacturing  industry,  and  acknowledges  that  an  interrup 
tion  of  trade  makes  that  advantage  greater,  instead  of  inflicting 


270  THEORY. 

a  loss.  It  seizes  immediately  upon  the  idea  of  passing  from  the 
condition  of  a  merely  agricultural  to  that  of  an  agricultural  and 
manufacturing  state,  and  of  thus  attaining  the  highest  degree 
of  prosperity,  civilization,  and  power. 

But  when,  after  great  progress  has  been  made  in  its  new- 
career  by  such  a  nation,  peace  is  re-established,  and  other  na 
tions  are  willing  to  resume  former  relations,  it  is  soon  perceived 
by  all  that  war  has  given  birth  to  new  interests,  which  the  re 
sumption  of  free  trade  would  entirely  destroy.  The  agricultural 
nation  finds  that,  to  re-open  foreign  markets  for  its  agricultural 
products,  it  must  sacrifice  the  manufacturing  industry  which  has 
arisen,  and  the  home  market  it  has  afforded  in  the  mean  time ; 
the  manufacturing  nation  perceives  that  the  increased  agricul 
tural  production  which  has  been  developed  within  it  during  the 
war,  must  be  in  like  manner  sacrificed,  if  free  trade  is  re-estab 
lished.  Both  find  it  their  interest,  in  these  circumstances,  to 
resort  to  protective  or  prohibitory  duties.  Such  is  the  history 
of  commercial  policy  during  the  last  fifty  years. 

War  has  mainly  been  the  origin  of  modern  systems  for  pro 
tection,  and  we  do  not  hesitate  to  say  that  it  would  have  been 
the  interest  of  manufacturing  powers  of  the  second  and  third 
rank  to  maintain  and  complete  these  systems,  even  if,  after  the 
return  of  peace,  England  had  not  committed  the  enormous  mis 
take  of  restraining  the  importation  of  food  and  raw  materials, 
and  of  keeping  alive,  consequently,  and  active,  all  the  induce 
ments  to  protection,  even  during  peace. 

As  a  primitive  nation,  the  agriculture  of  which  is  in  a  very 
imperfect  state,  can  only  advance  by  trade  with  a  manufacturing 
and  civilized  people,  so  the  nation  that  has  reached  a  higher 
degree  of  culture  can  only  increase  its  prosperity,  civilization, 
and  power,  by  the  aid  of  manufacturing  industry.  A  war  which 
facilitates  the  transition  from  a  merely  agricultural  state  to  that 
of  an  agricultural  and  manufacturing  people,  may  be  regarded 
as  a  blessing  to  a  country.  The  war  of  independence  in  North 
America,  despite  its  enormous  sacrifices,  resulted  in  a  real 
benefit  to  all  future  generations.  On  the  other  hand,  a  peace 


NATIONALITY    AND    ECONOMY.  271 

which  thrusts  back  into  the  purely  agricultural  condition  a 
people  already  embarked  in  manufactures,  is  a  misfortune  and 
an  evil  incomparably  more  injurious  than  war. 

Happily  for  the  manufacturing  powers  of  the  second  and 
third  rank,  England,  after  the  re-establishment  of  the  general 
peace,  of  her  own  accord  relaxed  her  efforts  to  grasp  the  manu 
facturing  monopoly  of  the  world,  by  limiting  the  importation 
of  food  and  raw  materials.  Moreover,  if  the  English  agricul 
turists  who,  during  the  war,  possessed  exclusively  the  internal 
market,  had  been  injuriously  affected  at  first  by  foreign  compe 
tition,  afterwards,  as  will  be  fully  explained  in  another  place, 
they  would  have  been  largely  indemnified  for  their  losses  by  the 
manufacturing  monopoly,  which  their  country  would  thus  have 
obtained. 

Some  of  these  manufacturing  nations  of  the  second  and  third 
rank,  of  which  the  industry  has  been  stimulated  into  life  by 
twenty-five  years  of  war,  and  afterwards  strongly  consolidated 
by  twenty-five  years  of  interdiction  from  the  English  market 
for  their  agricultural  products,  would  have  required  perhaps 
not  more  than  ten  or  fifteen  years  of  efficient  protection  to  be 
able  to  encounter  free  trade  with  England.  It  would  have  been 
most  unreasonable,  we  repeat,  for  such  nations,  after  the  sacrifices 
of  half  a  century,  to  renounce  the  immense  advantages  of  manu 
facturing  industry,  —  the  high  degree  of  culture,  prosperity, 
and  independence,  enjoyed  by  agricultural  and  manufacturing 
countries,  to  descend  to  the  inferior  rank  of  dependent  agricul 
tural  nations,  and  for  the  single  reason  that  it  pleased  England 
then  to  acknowledge  her  error,  and  to  entertain  a  presentiment 
of  the  approaching  elevation  of  the  continental  nations  to  a 
state  of  rivalry  with  her. 

Even  if  the  manufacturing  interest  of  England  should  obtain 
sufficient  influence  to  compel  concessions  as  to  the  importation  of 
agricultural  products,  the  House  of  Lords  being  composed  entirely 
of  proprietors  of  large  estates,  and  the  House  of  Commons 
also  embracing  a  majority  of  land-owners,  who  could  say, 
that  after  a  few  years  a  new  tory  ministry  in  other  circum- 


272  THEORY. 

i 

stances  would  not  restore  to  life  and  vigor  the  old  corn-laws  ?* 
Who  could  answer  for  it  that  a  new  maritime  war,  or  a  new 
continental  system,  might  not  again  separate  the  agriculturists 
of  the  continent  from  the  Island  manufacturers,  and  oblige  the 
nations  of  Europe  to  return  to  manufactures,  and  to  exert  anew 
all  their  powers  to  overcome  the  difficulties  of  beginning  another, 
of  which  the  whole  would  be  again  sacrificed  on  the  return  of 
peace  ? 

The  School  would  thus  condemn  the  nations  of  the  continent 
to  roll  upward  for  ever  the  stone  of  Sisyphus ;  to  be  constantly 
building  manufactories  during  war,  only  to  let  them  go  to  ruin 
at  the  return  of  peace. 

The  School  has  not  been  able  to  escape  these  absurd  results, 
because,  in  spite  of  the  name  given  to  the  science,  it  has  alto 
gether  excluded  politics  from  its  domain,  f  by  entirely  disre- 

*  The  manufacturing  interests  with  Cobden  for  their  champion,  have,  in 
fact,  obtained  these  concessions ;  we  are  perhaps  on  the  eve  of  knowing 
whether  they  are  to  be  recalled.  —  [H.  R] 

These  concessions  have  now  stood  for  ten  years,  and  are  likely  to  be 
permanent,  because  they  promote  the  real  interests  of  England.  Circum 
stances  may,  however,  yet  occur  in  which  the  agriculture  of  England  may 
suffer  greatly  from  this  cause.  —  [S.  C.] 

f  The  science  might  as  well  be  called  public  or  social  economy  as  political 
economy,  the  name  in  general  use,  and  which  signifies  nothing  else  but  the 
economy  of  a  city  or  nation  as  distinguished  from  private  economy ;  but 
whatever  be  the  name,  it  can  in  no  case  be  practicable  to  withdraw  the 
science  from  the  whole  field  of  politics.  —  [H.  R.] 

The  science  might  be  allowed  to  withdraw  from  the  whole  field  of  politics 
if  it  would  remain  withdrawn.  It  should  not,  indeed,  be  permitted  to  with 
draw  to  escape  difficulties  and  objections,  and  then  return  to  control  politics 
and  legislation  by  laws  framed  without  any  regard  to  the  condition  of  so 
ciety,  or  to  national  exigencies.  If  the  science  would  restrict  itself  to 
giving  us  light  without  giving  us  laws  —  that  is,  laws  to  govern  politics 
framed  without  any  regard  to  politics — it  would  be  comparatively  harmless. 

But  there  is  nothing  about  which  the  disciples  of  Say  have  more  busied 
themselves,  than  in  efforts  to  induce  statesmen  and  legislators  to  adopt 
their  laws  of  political  economy — to  incorporate  their  science  with  politics. 
They  are  importunate  with  rulers  to  abandon  the  region  of  facts  and  sound 
discretion,  the  observation  of  the  incessant  changes  constantly  occurring 
in  the  circumstances  of  men  and  nations,  and  commit  themselves  and  the 


NATIONALITY    AND    ECONOMY. 

garding  nationality,  and  taking  no  account  of  the  effects  of  war 
upon  the  foreign  trade  of  nations. 

Very  different  are  the  relations  between  the  agriculturist  and 
the  manufacturer,  when  both  are  living  in  the  same  country, 
and  in  the  mutual  enjoyment  of  perpetual  peace.  Every  exten 
sion,  every  improvement  of  a  manufacture  already  existing, 
increases  the  demand  for  agricultural  products.  This  is  no  un 
certain  demand ;  it  depends  not  on  laws,  nor  upon  commercial  / 
fluctuations  at  home  or  abroad,  nor  upon  political  agitations, 
nor  wars,  nor  invention,  nor  progress,  nor  finally,  upon  the 
crops  of  distant  countries  ;  the  agriculturist  of  the  country  does 
not  share  it  with  others  abroad,  but  is  sure  of  it  every  year  as 
his  own  market.  Whatever  may  be  the  state  of  the  harvest  in 
other  countries,  whatever  the  excitements  of  the  political  world, 
he  is  certain  of  the  sale  of  his  products,  and  of  his  supply  of 
manufactured  goods  at  satisfactory  and  regular  prices.  On  the 
other  hand,  every  improvement  in  the  agriculture  of  a  country, 
every  new  product  or  process,  is  a  new  stimulus  to  the  manu 
facturers  ;  for  every  increase  of  the  agricultural  product  carries 
with  it  a  corresponding  increase  of  manufactures.  This  recipro 
cal  action  of  these  two  great  industries,  ensures  the  permanent 
progress  of  the  nation. 

Political  power  not  only  guarantees  a  nation  the  increase  of 
its  prosperity  by  means  of  external  commerce  and  colonies,  but 
it  secures  the  continuance  of  prosperity  and  of  national  existence, 
facts  of  much  greater  moment  than  the  increase  of  material 
wealth.  By  her  Navigation  Act  England  obtained  political  v 
power,  and  by  the  aid  of  that  power  she  extended  her  manufac 
turing  supremacy  throughout  the  world.  Poland  has  been  razed 
from  the  list  of  nations  for  want  of  a  strong  middle  class,  which 
manufacturing  industry  could  alone  have  called  into  existence. 

The  School  cannot  deny  that  the  internal  trade  of  a  nation  is 
tenfold  greater  than  its  foreign  trade,  even  where  the  latter  has 

welfare  of  millions  on  millions  of  the  human  family  to  the  experiment  of 
their  theory,  to  strict  obedience  to  the  simple  laws  of  their  science.     We 
know  upon  whom  the  burden  of  failure  would  fall,  but  we  are  not  informed 
who  would  pay  the  damage.  —  [S.  0.] 
18 


274  £  t "  '          THEORY. 

reached  its  highest  degree  of  importance,  but  it  has  failed  to  draw 
from  that  fact  the  important  but  natural  conclusion  that  it  is 
tenfold  more  needful  to  preserve  and  improve  its  own  home 
market  than  to  seek  wealth  from  without,  and  that  external 
commerce  can  only  be  important  as  a  means  of  wealth  where 
national  industry  has  attained  a  high  degree  of  development. 

The  School  has  considered  markets  only  in  the  cosmopolite 
aspect,  and  not  at  all  in  a  political  point  of  view.  The  largest 
portion  of  the  sea-coasts  of  Europe  are  within  the  natural  circle 
of  supply  from  the  London,  Liverpool,  or  Manchester  manufac 
turers  ;  the  manufacturers  of  other  countries  can,  for  the  most 
part,  only  compete  with  them  in  their  own  maritime  cities. 
Larger  capital,  more  extensive  markets  wholly  their  own,  and 
which  admit  of  manufactures  upon  a  larger  scale,  and  conse 
quently  at  a  lower  price,  improved  methods,  and  lastly,  cheap 
maritime  freights,  secure  at  present  to  English  manufacturers, 
over  those  of  other  countries,  advantages  which  long  and  per 
severing  protection  and  improvement  of  the  means  of  communi 
cation  can  alone  procure  for  others.  Now  the  market  of  the 
sea-coast  is  of  vast  importance  to  a  nation,  as  well  in  reference  to 
interior  markets  as  to  the  exterior,  and  a  nation  of  which  the 
sea-coast- is  devoted  to  foreign  more  than  to  the  home  trade,  is 
both  economically  and  politically  divided.  Nay,  shall  I  not 
rather  say,  there  can  be  no  more  unfavorable  condition  for  a 
nation  in  both  respects,  than  to  find  its  maritime  places  sympa 
thizing  more  actively  with  the  interests  of  people  of  other 
nations  than  with  those  of  their  own. 

Science  should  never  bring  in  question  nationality,  nor  be 
ignorant  of  it,  nor  misrepresent  it,  to  sustain  any  cosmopolite 
theory.  Its  true  end  can  be  realized  only  by  conforming  to 
nature,  and  by  endeavoring  to  elevate  the  different  peoples 
according  to  its  own  laws.  How  little  success  these  lessons  of 
the  School  have  hitherto  obtained  in  practice !  This  is  less  the 
fault  of  practical  men,  who  certainly  understand  something  of 
national  interests,  than  of  theories  contradicted  by  experience, 
to  adopt  which,  practical  men  must  hesitate.  Have  these  theo 
rists  prevented  nations  so  little  advanced  as  those  of  South 


NATIONALITY    AND    ECONOMY.  275 

America  from  adopting  the  protective  system?  Have  they 
prevented  protection  from  being  extended  to  the  production  of 
food  and  raw  materials  —  products  so  little  requiring  protection, 
and  upon  which  any  restriction  can  only  injure  both  the  nation 
imposing  it,  and  the  nation  against  which  it  is  directed  ?  Have 
they  prevented  the  nicest  and  most  costly  manufactured  articles, 
objects  of  luxury,  from  being  included  among  those  which  require 
protection,  however  evident  it  may  be  that  such  articles  might  be 
given  up  to  competition  without  the  slightest  danger  to  the 
prosperity  of  a  country  ?  No  :  theory  has  hitherto  accomplished 
no  capital  reform,  and  will  not,  as  long  as  it  stands  in  opposi 
tion  to  the  nature  of  things.  Let  theory  build  upon  nature  and 
experience,  and  it  may  yet  accomplish  great  good. 

It  would  render,  indeed,  a  special  service  to  the  world  if  it 
would  establish  that  restrictions  upon  trade  in  natural  pro 
ducts  and  raw  materials  greatly  injure  the  nation  that  employs  X 
them,  and  that  the  protective  system  is  legitimate  only  so  far 
as  it  has  in  view  the  industrial  education  of  the  country.  By 
establishing  upon  wise  principles  the  protective  system  applied  y 
to  manufactures,  it  may  induce  nations  still  retaining  the  pro 
hibitive  system,  France  for  instance,  to  renounce  it  by  degrees. 
Manufacturers  will  not  oppose  that  change  when  they  shall  be 
assured  that  the  theorists,  far  from  seeking  their  ruin,  assume 
the  maintenance  and  the  development  of  existing  manufactures 
as  the  basis  of  a  sound  commercial  policy. 

If  theory  teaches  the  Germans  that  they  can  advantageously 
encourage  their  manufacturing  industry  only  by  a  gradual  ele 
vation,  then  afterwards  by  a  diminution  also  gradual  of  their 
protective  duties,  and  that  foreign  competition  to  a  certain 
degree  cannot  but  aid  the  progress  of  their  manufacture,  it  will 
render  to  free  trade  positively  a  greater  service  than  by  any 
co-operation  in  the  ruin  of  German  industry. 

Theory  must  not  require  from  the  United  States  that  they 
give  up  to  free  competition  with  foreign  countries  the  branches 
of  manufacture  in  which  foreigners  are  assisted  by  cheap  labor, 
the  low  price  of  raw  materials  and  food,  as  well  as  by  a  greater 
use  of  machinery ;  but  it  can  meet  with  no  objection  if  it  main- 


276  THEORY. 

tains  that  the  United  States,  whilst  wages  remain  there  so  much 
higher  than  in  countries  of  older  culture,  will  work  efficaciously 
toward  the  development  of  their  productive  power,  their  civiliza 
tion,  and  their  political  power,  by  granting  easy  access  to  manu 
factured  articles,  in  the  price  of  which,  labor  constitutes  the 
principal  element,  upon  condition,  however,  that  other  countries 
admit  their  agricultural  products  and  their  raw  materials  upon 
similar  terms. 

The  theory  of  free  trade  would  then  be  welcome  in  Spain, 
Portugal,  and  Naples,  in  Turkey,  Egypt,  in  all  countries  more 
or  less  deficient  in  civilization,  and  in  all  warm  climates. 
Countries  in  the  stage  of  civilization  in  which  these  now  are  can 
scarcely  be  supposed  to  entertain  the  extravagant  idea  of  creating 
a  manufacturing  industry  by  means  of  protective  duties. 

England  must  then  cease  to  believe  that  she  has  been  called 
to  the  manufacturing  monopoly  of  the  world.  She  will  no 
longer  insist  that  France,  Germany,  and  the  United  States 
shall  sacrifice  their  manufactures  for  the  small  advantage  of 
having  their  agricultural  products  and  their  raw  materials 
admitted  into  Great  Britain.  She  will  acknowledge  the  legiti 
macy  of  the  protective  system  in  those  countries,  while  she  finds 
free  trade  to  be  the  policy  which  best  promotes  her  own  interests  ; 
for  theory  will  demonstrate  to  her  that  a  nation  having  reached 
a  manufacturing  supremacy  can  keep  her  manufacturers  and 
tradesmen  from  inaction,  recoil,  and  idleness,  only  by  the  free 
importation  of  food  and  raw  materials,  and  by  the  competition 
of  foreign  industry. 

England  will  take  a  course  quite  contrary  to  that  she  has 
heretofore  pursued ;  instead  of  soliciting  other  nations  to  adopt 
free  trade,  whilst  she  maintains  at  home  her  rigorous  prohibitive 
system ;  she  will  open  to  the  world  her  own  markets,  without 
troubling  herself  with  the  protective  system  of  others ;  she  will 
postpone  her  hopes  for  the  advent  of  free  trade,  until  the  time 
when  other  nations  shall  no  longer  fear  the  destruction  of  their 
manufactures  as  a  result  of  free  competition.  In  the  meanwhile, 
until  that  day  arrive,  England  will  indemnify  herself  for  her 
diminished  exportation  of  articles  manufactured  for  general 


NATIONALITY    AND    ECONOMY.  277 

consumption  caused  by  the  protective  systems  of  others  by 
exporting  freely  the  finer  kinds  of  goods,  and  by  finding  and 
opening  up  new  markets. 

She  will  endeavor  to  restore  quiet  in  Spain,  in  the  East,  and  in 
the  States  of  Central  and  South  America ;  she  will  use  her  influence 
in  all  the  barbarous  or  half-civilized  countries  of  that  part  of 
the  world  as  well  as  of  Asia  and  Africa,  to  establish  stronger 
and  more  enlightened  governments  for  the  greater  security  of 
goods  and  persons,  for  the  construction  of  roads  and  canals,  for 
the  promotion  of  education  and  knowledge,  for  the  encourage 
ment  of  morality  and  industry,  for  the  repression  of  fanaticism, 
superstition  and  indolence.  If,  at  the  same  time,  she  removes 
her  restrictions  upon  the  introduction  of  food  and  raw  materials, 
her  exports  of  manufactured  goods  will  increase  in  an  enormous 
proportion,  and  much  more  safely  than  if  she  should  continue  to 
speculate  upon  the  ruin  of  the  continental  manufacturers. 

But  to  crown  her  civilizing  efforts  among  the  more  or  less 
barbarous  nations,  England  must  not  be  exclusive ;  she  must 
not  attempt  by  means  of  commercial  privileges,  such  as  were 
obtained  from  Brazil,  to  monopolize  markets  and  to  exclude 
other  nations  from  them. 

Such  conduct  always  excites  national  jealousies  and  pro 
vokes  opposition  to  the  efforts  of  England.  This  selfish  policy 
explains,  obviously,  why  the  influence  of  civilized  nations  has  been 
so  small  hitherto  on  the  civilization  of  those  countries.  England 
should  therefore  introduce  into  the  law  of  nations  the  principle 
of  equality  for  the  commerce  of  all  manufacturing  countries  in 
every  part  of  the  world  ;  not  only  would  she  find  the  concurrence 
of  all  the  enlightened  powers  in  her  civilizing  efforts,  but  further, 
without  injuring  her  own  trade  she  might  allow  other  manufac 
turing  people  to  undertake  similar  enterprises.  Her  superiority 
in  all  departments  would  secure  for  her  at  all  times  the  largest 
share  in  the  supply  of  those  markets. 

The  continual  intrigues  of  the  English  against  foreign  manu 
facturers  might  perhaps  be  justified,  if  the  monopoly  of  the 
world  was  indispensable  for  the  prosperity  of  England,  if  it  were 
not  demonstrable  by  evidence  that  other  nations  besides  England, 


278  THEORY. 

who  aim  at  great  manufacturing  power,  may  actually  attain  their 
^object  without  any  reduction  of  her  power  or  wealth;  that 
England  need  not  become  poorer  because  other  nations  grow 
richer,  and  that  nature  offers  resources  ample  enough  to  permit 
an  industry  equal  to  that  of  England  to  be  developed  in  Ger 
many,  France,  and  North  America,  without  injuring  her  pros 
perity. 

In  this  respect  it  is  to  be  first  noticed,  that  a  nation  which 
has  secured  its  own  internal  market  and  manufacturing  industry 
gains,  in  the  course  of  time,  in  production  and  consumption  of 
manufactured  articles,  much  more  than  the  nation  which  here 
tofore  supplied  it  loses,  in  consequence  of  its  exclusion  under  the 
operation  of  the  domestic  system ;  for  the  nation  thus  manufac 
turing  for  itself  and  completing  its  economical  development  must 
become  incomparably  richer  and  more  populous,  and  by  conse 
quence  more  able  to  purchase  and  consume  manufactured  goods 
than  if  it  had  renlained  dependent  upon  foreign  producers. 

In  regard,  moreover,  to  exports  of  manufactured  goods,  the 
countries  of  the  temperate  zone,  destined  and  fitted  by  nature 
particularly  for  manufacturing  industry,  should  seek  their  prin 
cipal  markets  in  the  countries  of  the  torrid  zone,  which  supply 
them  with  tropical  products  in  exchange.  But  the  consumption 
of  manufactured  goods  by  tropical  countries  is  limited,  on  the 
one  hand,  by  their  ability  to  produce  a  surplus  of  articles  pecu 
liar  to  their  climate,  and  on  the  other,  by  the  activity  of  the 
demand  for  their  products  in  the  countries  of  the  temperate 
zone. 

If  it  can  be  established,  that  tropical  countries  can  in  the 
course  of  time  produce  from  five  to  ten  times  more  sugar,  rice, 
coffee,  cotton,  etc.,  than  they  have  hitherto  produced,  it  can  be 
shown  also  that  the  temperate  zone  can  increase  five  or  tenfold 
their  present  exports  of  manufactured  articles  to  the  people  of 
the  torrid  zone. 

The  possibility  of  the  continental  nations  increasing  in  that 
proportion  their  consumption  of  tropical  products,  is  demon 
strated  by  the  increase  of  such  consumption  in  England,  during 
the  last  fifty  years ;  but  we  must  not  forget  that  that  increase 


NATIONALITY    AND    ECONOMY..  279 

would  have  been  probably  very  much  greater  but  for  the  enor 
mous  duties  to  which  these  tropical  products  were  subjected. 

That  it  is  possible  to  increase  the  products  of  the  torrid 
zone,  Holland  has  furnished  us,  during  the  past  five  years,  irrefu 
table  proofs,  in  Sumatra  and  Java ;  and  England,  in  the  East 
Indies.  From  1835  to  1839,  England  quadrupled  her  importa 
tion  of  sugar  from  the  East  Indies ;  her  importation  of  coffee 
from  the  same  country  has  increased  in  a  proportion  still  more  con 
siderable,  and  the  import  of  cotton  has  also  notably  augmented. 
English  journals  of  late  dates  (February,  1840,)  proudly  an 
nounce  that  the  productive  power  of  the  East  Indies  for  such 
articles  is  unbounded,  and  that  the  time  is  not  distant  when 
England  will  become  independent  as  to  these  products  of 
America  and  the  West  Indies. 

On  the  other  hand,  Holland,  overloaded  with  her  colonial  pro 
ductions,  is  unremittingly  in  search  of  new  markets.  Let  us  not 
forget,  besides,  that  the  States  of  North  America  continue  to 
increase  their  product  of  cotton — that  Texas  has  recently  become 
a  nation,  destined,  undoubtedly,  to  conquer  the  whole  of  Mexico, 
and  make  that  fertile  country  what  the  Southern  States  of  the 
American  Union  are  at  this  time.  Let  us  trust  that  the  reign 
of  order  and  law,  labor  and  intelligence,  may  by  degrees  be 
extended  over  all  South  America,  from  Panama  to  Cape  Horn; 
then  over  all  the  surface  of  Asia  and  Africa;  augmenting 
everywhere,  not  only  production,  but  a  surplus  of  products. 
It  is  easy  to  comprehend  that  there  is  here  a  field  open  to  the 
sale  of  manufactured  goods  for  more  than  one  nation.  If  we 
calculate  the  surface  of  the  world  now  devoted  to  the  production 
of  tropical  products,  and  if  we  compare  it  with  the  quantity 
which  nature  has  fitted  for  that  culture,  we  shall  find  that  hardly 
the  fiftieth  part  has  been  occupied. 

How  could  England  appropriate  to  herself  the  exclusive  privi 
lege  of  supplying  manufactured  goods  for  all  those  countries 
which  produce  tropical  commodities,  when  the  quantity  exported 
from  the  West  Indies  would  suffice  for  the  supply  of  her  whole 
demand  for  such  products  ?  How  could  England  obtain  a  market 
for  her  manufactures  in  countries  of  which  she  cannot  take  the 


280  THEORY. 

commodities  in  exchange?  And  how  can  a  vast  demand  for 
tropical  commodities  arise  upon  the  European  continent,  if  the 
continent,  by  its  manufactured  productions,  is  not  enabled  to 
purchase  and  consume  them  ? 

It  is  obvious  then  that  the  repression  of  the  continental  manu 
factures  may  impede  the  progress  of  continental  industry  without 
augmenting  the  wealth  of  England. 

It  is  very  evident  that  during  our  times,  and  for  a  long  future, 
the  torrid  zone  offers  sufficient  elements  of  exchange  for  all  the 
manufacturing  nations. 

It  is  obvious,  finally,  that  a  manufacturing  monopoly,  such  as 
would  now  result  from  the  free  admission  of  English  manu 
factured  products  into  the  continental  nations  of  Europe 
and  into  the  States  of  North  America,  is  in  no  respect  more 
advantageous  to  mankind  than  the  protective  system  which  tends 
to  the  development  of  manufacturing  industry  throughout  the 
whole  temperate  zone,  for  the  benefit  of  the  entire  agriculture 
of  the  whole  torrid  zone. 

The  start  which  England  has  taken  in  manufactures,  shipping, 
and  commerce,  should  not  deter  any  of  the  nations  prepared  for 
manufacturing  industry,  by  their  territory,  their  power,  or  their 
intelligence,  from  entering  the  list  of  nations  holding  the  sceptre 
of  industry.  Manufactures,  trade,  and  shipping,  have  a  future 
which  will  transcend  the  present,  as  much  as  the  present  tran 
scends  the  past.  It  only  needs  courage  to  believe  in  a  great 
national  destiny,  and  to  advance  in  that  faith.  But  before  all, 
it  is  necessary  to  have  sufficient  national  mind  to  plant  now  and 
to  prop  the  tree  which  will  furnish  its  most  abundant  fruits  to 
future  generations.  Each  country  should  at  once  take  posses 
sion  of  its  own  markets  for  its  own  industry,  at  least,  as  to  the 
objects  of  general  consumption,  and  make  due  exertions  to 
import  the  products  of  the  torrid  zone  in  exchange  for  manu 
factured  goods.  Such  is  the  special  problem  which  the  German 
association  has  yet  to  solve,  if  Germany  would  not  remain  far 
behind  France,  North  America,  or  even  Russia. 


POLITICAL    AND    NATIONAL    ECONOMY.         281 


CHAPTER  VI. 

THE  ECONOMY  OF  THE  PEOPLE  AND  THE  ECONOMY  OF  THE 
STATE.    POLITICAL  ECONOMY  AND  NATIONAL  ECONOMY. 

WHAT  refers  to  the  collection,  to  the  use  and  administration 
of  the  material  means  of  a  government,  or  the  financial  economy 
of  the  state,  should  never  be  confounded  with  the  institutions, 
the  regulations,  the  laws,  and  the  circumstances  which  govern 
the  economical  condition  of  the  citizens,  that  is,  with  the  economy 
of  the  people.  That  distinction  is  to  be  observed  with  regard 
to  all  societies,  great  or  small,  to  a  whole  nation  as  well  as  to 
fragments  of  a  nation. 

In  a  federative  State,  the  financial  economy  is  divided  into 
an  economy  of  the  particular  states,  and  into  the  economy  of 
the  union. 

The  economy  of  the  people  becomes  a  national  economy* 
when  the  state  or  the  confederation  embraces  the  whole  nation, 
to  which  its  population,  its  extent  of  territory,  its  political 
institutions,  its  civilization,  its  wealth,  and  its  power,  promise 
independence,  duration,  and  political  importance.  In  this  case 
the  economy  of  the  people  and  national  economy  are  one  and 
the  same  thing.  They  constitute,  with  the  financial  economy 
of  the  state,  the  political  economy  of  the  nation. 

In  the  States,  on  the  contrary,  the  population  and  the  terri 
tory  of  which  consist  of  only  the  fraction  of  a  nation,  or  of  a 
national  territory,  and  which  neither  by  immediate  political 
bond,  nor  by  federative  bond,  form  a  whole  with  other  fractions, 
there  can  only  be  an  economy  of  the  people,  in  opposition,  as  it 
were,  to  individual  economy,  or  the  financial  economy  of  the 
State.  In  such  an  imperfect  condition,  the  objects  and  the 
wants  of  a  great  nationality  cannot  be  taken  into  consideration ; 
the  economy  of  the  people  cannot  be  regulated  with  any  view 

*  This  distinction  is  unknown  in  the  United  States,  where  Say's  system 
is  studied  almost  exclusively. 


282  THEORY. 

of  administering  a  nation  complete  in  itself,  and  of  securing  its 
independence,  duration  and  power.  In  this  case,  politics  must 
of  course  be  excluded  from  economy ;  here  men  have  to  con 
sider  only  the  natural  laws  of  social  economy  in  general,  as 
they  would  exhibit  themselves  if  there  were  no  such  thing  in 
existence  as  a  compact  and  powerful  nationality,  or  a  national 
economy. 

It  is  from  this  point  of  view  that  there  has  been  developed  in 
Germany  the  science  which  was  called,  at  first,  Economy  of  the 
State,  afterwards  Political  Economy,  then  Economy  of  the  People, 
without  discovery,  however,  of  the  fundamental  error  of  the 
systems  thus  designated. 

The  notion  of  a  national  economy  could  not  be  compre 
hended,  for  no  such  system  had  been  exemplified ;  and  because, 
for  the  particular  and  determinate  idea  of  a  nation,  the  general 
and  vague  idea  of  association  had  been  substituted ;  an  idea 
applicable  to  the  whole  of  mankind,  to  a  small  country,  or  to  a 
single  city,  as  well  as  to  a  nation. 


CHAPTER  VII. 

OF  MANUFACTURING  INDUSTRY,  AND  OF  THE  PERSONAL, 
SOCIAL,  AND  POLITICAL  PRODUCTIVE  FORCES  OR  POWERS 
OF  A  COUNTRY. 

AMONG  the  effects  of  an  imperfect  agriculture  may  be  found 
slowness  of  apprehension,  bodily  inactivity,  adherence  to  old 
ideas,  old  processes,  old  usages,  old  habits,  a  defective  edu 
cation,  with  lack  of  comfort  and  personal  liberty.  The  desire 
of  a  continual  increase  of  moral  and  material  wealth,  emulation, 
and  a  love  of  liberty,  characterise,  on  the  contrary,  a  manufac 
turing  and  commercial  people. 

That  difference  is  explained,  in  part,  by  differences  in  the 
mode  of  living  and  education  between  farmers  and  manufac- 


MANUFACTURING    INDUSTRY.  283 

turers,  in  part  by  that  of  their  occupations  and  the  resources 
which  they  require.  Farmers  live  scattered  over  the  whole 
surface  of  a  country,  and  maintain  with  each  other  but  slight 
intercourse.  The  occupation  of  each  is  nearly  the  same  with 
that  of  every  other;  their  products  are  generally  the  same. 
Their  surplus  products  are  nearly  the  same ;  they  have  the  same 
wants,  and  each  one  is  the  largest  consumer  of  his  own  product ; 
the  occasions  for  moral  and  material  intercourse  are  conse 
quently  few.  The  farmer  addresses  himself  less  to  men  than  to 
inanimate  nature.  Accustomed  to  harvest  in  the  same  spot  in 
which  he  has  sowed  only  after  a  long  interval,  to  confide  chiefly 
in  a  superior  power  for  the  success  of  his  labors,  moderation, 
patience,  resignation,  with  dulness  and  inactivity  of  mind,  be 
come  for  him  a  second  nature.  His  occupation  preventing  inter 
course  with  man,  requires  habitually  but  little  intellectual  effort 
and  no  very  great  dexterity.  He  learns  by  imitation  in 
the  circle  of  the  family  in  which  he  was  born,  and  the  idea 
seldom  occurs  to  him  that  he  might  perform  his  work  otherwise, 
and  to  better  advantage.  From  the  cradle  to  the  tomb,  he  moves 
constantly  in  the  same  limited  circle  of  persons  and  connections. 
Instances  of  a  brilliant  prosperity  due  to  extraordinary  ex 
ertions  rarely  strike  his  eyes.  Land  as  well  as  poverty  is 
transmitted  under  this  rule  from  generation  to  generation,  and 
almost  all  the  productive  power  to  be  gained  from  emulation 
is  lost. 

The  life  of  manufacturers  is  entirely  different.  Brought  toge 
ther  by  their  occupation,  manufacturers  can  only  live  in  society  > 
and  by  society,  in  trade  and  by  trade.  They  purchase  all  their 
food  and  all  their  raw  materials  in  the  market,  and  they  retain 
for  their  own  consumption  but  the  smallest  part  of  their  products. 
Whilst  the  agriculturist  relies  chiefly  upon  the  benefits  of  na 
ture,  the  success,  the  very  existence  of  manufacturers  depends  * 
mainly  upon  trade  or  exchange  of  products.  Whilst  the  former 
does  not  know  his  consumer,  and  has  little  knowledge  of  the 
market  in  which  his  products  are  sold,  the  latter  is  dependent 
for  all  his  progress  upon  his  customers.  The  rates  of  raw  ma 
terials,  of  food,  of  labor,  of  manufactured  goods  and  money, 


284  THEORY. 

vary  without  ceasing;  the  manufacturer  never  knows  exactly 
what  will  be  the  amount  of  his  profits.  The  favors  of  nature 
and  daily  labor  do  not  secure  to  him  life  and  comfort  as  to  the 
cultivator.  He  must  be  indebted  for  them  solely  to  his  intelli 
gence  and  his  activity.  He  must  labor  to  acquire  the  super 
fluous,  to  be  assured  of  the  necessary ;  to  become  rich,  that  he 
may  not  become  poor.  If  he  is  a  little  quicker  than  others,  he 
succeeds ;  if  slower,  he  is  ruined.  He  is  incessantly  buying  and 
selling,  exchanging  and  negotiating.  He  is  everywhere  in  colli 
sion  with  men,  with  laws  and  institutions ;  and  he  is  kept  at  all 
times  on  the  alert  by  changing  circumstances  ;  he  has  a  hundred 
fold  more  occasion  to  exert  his  mind  than  the  farmer.  For  the 
proper  management  of  business,  he  must  have  some  acquaint 
ance  with  foreign  countries.  For  the  establishment  of  his  busi 
ness,  he  is  under  the  necessity  of  making  extraordinary  exertions. 
Whilst  the  farmer  has  relations  for  the  most  part  only  with  his 
own  neighbourhood,  the  relations  of  the  manufacturer  extend  to 
every  part  of  the  world.  The  desire  of  acquiring  or  of  retain 
ing  the  confidence  of  his  countrymen,  and  a  ceaseless  competi 
tion  endangering  his  living  and  his  success,  are  to  him  incessant 
stimulants  to  an  unremitting  activity  and  an  uninterrupted  pro 
gress.  A  thousand  examples  teach  him  that,  by  extraordinary 
efforts  a  man  may  rise  from  the  lowest  position  to  the  highest 
ranks  of  society ;  but  that  by  routine  and  negligence,  he  may 
fall  from  the  highest  rank  in  the  social  scale  to  the  lowest  place. 
This  state  of  things  begets  in  manufacturers  an  energy  of  which 

'•no  trace  is  found  in  the  ranks  of  an  imperfect  agriculture. 

It  is  plain  indeed  that  the  occupation  of  manufacturers  de 
velops  and  brings  into  exercise  faculties  and  talents  of  a  far  higher 
and  more  varied  order  than  does  agriculture. 
*   Adam  Smith  undoubtedly  supported  one  of  those  paradoxes, 

'of  which,  according  to  his  biographer,  Dugald  Stewart,  he  was 
so  fond,  when  he  asserted  that  agriculture  required  more  skill 
than  the  industrial  arts.  Without  inquiring  whether  the  con 
struction  of  a  watch  requires  more  skill  than  the  management 
of  a  farm,  we  merely  remark  that  all  the  employments  of  a  farm 
are  of  the  same  nature,  whilst  those  of  a  manufacture  are  varied 


MANUFACTURING    INDUSTRY.  285 

to  infinity.  Nor  let  it  be  forgotten,  in  this  comparison,  that  it 
is  primitive  agriculture  that  we  have  in  view,  not  the  agricul 
ture  which  has  been  improved  under  the  influence  of  manufac 
tures.  If  the  condition  of  the  cultivator  in  England  appeared 
to  Adam  Smith  much  nobler  than  that  of  the  manufacturer,  the 
reason  escaped  him  that  it  had  been  elevated  by  the  action  of 
manufactures  and  commerce. 

It  is  obvious  that  agriculture  requires  only  the  same  kind  of  y 
qualification,  bodily  strength,  and  perseverance  in  the  execution 
of  rude  tasks,  united  to  a  certain  disposition  to  order ;  whilst 
manufacture  exacts  an  immense  variety  of  intellectual  qualifica 
tions  and  of  talents  natural  and  acquired.     The  demand  for  this 
great  diversity  of -faculties  in  a  manufacturing  state  gives  to  * 
each  individual  an  opportunity  of  obtaining  employment  or  a 
vocation  conformable  to  his  aptitude,  whilst  in  an  agricultural 
state   such   a   choice  is  very  limited.     In   the  former,  mental 
acquirements  are  in  much  higher  esteem  than  in  the  second,  in  A 
which  the  merit  of  a  man  is  generally  measured  by  his  bodily 
strength.     It  is  not  rare  in  the  former  to  find  feeble  or  physi 
cally  disabled  men  receiving  higher  remuneration   than   able- 
bodied   and   strong  men.     The   least   strong,  as   women   and 
children,  the  impotent  and  the  aged,  find  in  the  manufactory* 
employment  and  remuneration. 

Manufactures  are  the  daughters  of  science  and  the  fine  arts, 
which  are,  in  their  turn,  supported  and  maintained  by  the 
industrial  arts.  How  little  the  recourse  of  the  primitive  farmer 
to  science  or  to  art,  how  little  he  wants  their  aid  for  the  con 
struction  of  the  coarse  implements  he  employs !  Of  course,  it  is 
by  the  aid  of  agriculture  and  the  profits  it  furnishes,  that  from 
the  beginning  man  was  able  to  devote  himself  to  science  and  the 
fine  arts ;  but  in  the  absence  of  manufactures,  science  and  art 
have  been  confined  exclusively  to  the  ranks  of  a  favored  few, 
and  their  beneficent  influences  have  never  reached  the  multi 
tudes.  There  is  hardly  a  manufacturing  operation  which  is  not 
connected  with  physics,  mechanics,  chemistry,  mathematics, 
or  drawing.  There  is  no  progress,  no  discovery  in  the  sciences 
which  does  not  improve  and  transform  a  hundred  branches  of 


286  THEORY. 

industry.  In  a  manufacturing  state,  consequently,  science  and 
art  must  become  popular.  The  want  of  culture  and  instruction 
in  the  way  of  written  treatises  and  expositions  experienced  by  a 
great  number  of  persons  called  to  the  application  of  science  to 
the  arts,  induces  men  of  special  talent  to  devote  themselves  to 
the  professions  of  teachers  and  writers  in  these  departments. 
The  competition  of  these  talents,  added  to  a  great  demand  for 

,  their  services,  induces  a  division  and  a  combination  of  scientific 
labors  which  has  a  happy  influence,  not  only  on  the  development 

^  of  science,  but  on  the  progress  of  the  fine  arts  and  the  industrial 
arts.  The  effects  of  these  improvements  are  soon  extended  even 
to  agriculture.  In  no  country  are  agricultural  machines  and 

<  implements  more  perfect,  and  in  none  is  agriculture  in  so 
advanced  a  state,  as  where  manufacturing  industry  is  flourishing. 
Under  the  influence  of  the  latter,  husbandry  becomes  itself  a 
manufacture,  a  science. 

The  union  of  the  sciences  with  the  industrial  arts  has  created 
that  great  physical  power  which  in  modern  times  is  a  ten-fold 
substitute  for  the  labor  of  slaves  in  antiquity,  and  which  is 
destined  to  exert  so  important  an  influence  upon  the  condition 
of  the  masses,  upon  the  civilization  of  barbarous  people,  upon 

*  the  salubrity  of  inhabited  countries,  and  upon  the  power  of 
nations  long  civilized.  That  vast  physical  agent  is  the  power 
of  machinery. 

A  manufacturing  nation  has  a  hundred-fold  more  occasion  to 
employ  machinery  than  one  merely  agricultural.  A  man  with 
but  one  arm  can,  by  the  aid  of  a  steam-engine,  accomplish  an 
hundred-fold  more  than  the  strongest  man  with  both  arms. 

The  power  of  machines,  added  to  the  improved  modes  of 
transportation  in  modern  times,  gives  to  a  manufacturing 
country  an  immense  superiority  over  a  merely  agricultural  state. 
It  is  obvious  that  canals,  railroads,  and  steam  navigation,  are 
indebted  for  their  existence  solely  to  manufacturing  industry, 
and  that  they  can  be  extended  only  by  its  aid  over  the  whole 
surface  of  any  country.  The  purely  agricultural  State,  in  which 
every  cultivator  produces  the  largest  portion  of  the  articles 
which  his  wants  require,  and  consumes  the  chief  part  of  what 


MANUFACTURING  INDUSTRY.        287 

he  produces,  where  individuals  have  but  little  intercourse  with 
each  other,  cannot  produce  a  movement  of  merchandises  and 
persons  large  enough  to  cover  the  expenses  of  building  and 
keeping  up  such  expensive  structures. 

New  inventions  and  improvements  are  but  little  appreciated 
by  a  purely  agricultural  population.  Those  who  thus  employ 
their  minds  among  such  people,  generally  lose  their  time  and 
their  labor.  In  a  manufacturing  State,  on  the  contrary,  there 
is  no  way  which  conducts  a  man  of  science  or  of  skill  to.  wealth 
and  consideration  sooner  than  that  of  invention  and  discovery. 
In  the  latter,  genius  is  better  appreciated  and  more  highly  re 
munerated  than  talent ;  and  talent,  more  than  physical  power. 
In  an  agricultural  State,  if  we  except  public  services,  the  rule 
is  very  nearly  the  opposite. 

The  influence  of  manufactures  upon  the  development  of  the 
power  of  physical  labor,  is  not  less  than  upon  the  moral  power 
of  the  nation ;  they  afford  to  workmen  enjoyments  and  stimu 
lants,  which  excite  them  to  the  display  of  their*  faculties,  and 
occasions  for  their  full  employment.  It  is  an  indisputable  fact, 
that  in  a  prosperous  manufacturing  community,  laborers,  inde 
pendently  of  the  assistance  afforded  by  machinery  and  better 
implements,  accomplish  daily  much  greater  tasks  than  laborers 
are  ever  known  to  achieve  in  agriculture. 

The  well-known  fact,  that  among  manufacturers  time  has  aa 
incomparably  greater  value  than  among  farmers,  testifies  to  a 
higher  estimation  of  labor.  The  degree  of  the  civilization  of  a 
people  and  the  estimate  they  fix  upon  labor,  cannot  be  better 
measured  than  by  the  value  they  set  upon  time.  The  savage 
remains  whole  days  idle  in  his  hut.  How  can  a  shepherd  realize 
the  value  of  time  —  to  him  a  heavy  burden,  which  even  recrea 
tion  and  sleep  scarce  render  tolerable?  How  can  a  slave,  a 
serf,  a  man  liable  to  enforced  services,  learn  how  to  save  or 
value  time  ?  In  his  view,  labor  is  a  punishment,  and  idleness 
an  advantage.  It  is  only  by  manufacturing  industry  that  men 
learn  to  comprehend  the  value  of  time ;  with  them,  to  gain  or 
lose  time  is  equivalent  to  gaining  or  losing  money.  The  zeal 
which  inspires  the  manufacturer  to  make  the  utmost  of  his  time 


288  THEORY. 

is  communicated  even  to  husbandmen.  Manufactures  augment 
the  demand  for  agricultural  products,  and  add,  of  course,  to  the 
value  of  the  soil ;  larger  capitals  are  employed  in  farming ;  con 
sumption  is  increased ;  it  becomes  necessary  to  obtain  from  the 
soil  a  larger  product  to  meet  higher  rents,  the  interest  of  in 
creased  capital,  and  increased  consumption.  People  are  soon 
in  a  condition  to  pay  higher  wages,  but  they  claim  at  the  same 
time  a  better  return  in  services.  The  workman  begins  to  find 
that  in  .his  bodily  strength,  and  in  the  skill  with  which  it  is  used, 
he  possesses  the  means  of  improving  his  condition.  He  begins 
then  to  comprehend  the  import  of  the  proverb,  "  time  is  money." 

The  isolation  of  the  farmer,  and  his  lack  of  intelligence,  dis 
able  him  from  contributing  much  to  the  general  fund  of  civili 
zation,  or  from  appreciating  the  value  of  political  institutions, 
still  more  from  taking  an  active  part  in  the  management  of 
public  affairs,  in  the  administration  of  justice,  or  in  the  defence 
of  civil  liberty  and  personal  rights.  Purely  agricultural  na 
tions  have  for  the  most  part  lived  in  slavery,  or  at  least,  under 
the  yoke  of  despotism,  feudality  or  theocracy.  The  exclusive 
possession  of  the  soil  secures  to  princes,  to  nobles,  or  to  the 
order  of  the  clergy,  over  the  whole  rural  population,  an  authority 
from  which  it  can  seldom  escape  by  flight,  or  withdraw  by  choice. 

Under  the  empire  of  habit,  the  yoke  imposed  by  force,  or  by 
superstition,  or  by  priestly  power,  upon  purely  agricultural 
nations,  is  fixed  so  firmly  on  the  necks  of  the  people,  that  they 
at  last  consider  it  as  an  essential  part  of  themselves  and  a  con 
dition  of  their  existence. 

The  law  of  the  division  of  labor  and  the  association  of  pro 
ductive  power,  brings  manufacturers  together  with  an  irresistible 
influence.  The  collision  of  minds  emits  sparks  of  intelligence, 
as  the  smitten  flint  emits  fire.  There  is  no  intellectual  friction 
but  where  men  are  brought  together  ;  where  the  intercourse  of 
business  and  studies — those  of  society  and  political  life — are 
frequent ;  where  there  is  a  great  exchange  of  goods  and  ideas. 
The  more  men  live  together,  the  more  they  need,  in  their 
respective  branches  of  industry,  the  concurrence  of  all  the 
others;  the  more  their  industry  exacts  intelligence,  prudence 


MANUFACTURING    INDUSTRY.  289 

and  culture,  the  less  arbitrary  rule,  the  absence  of  law,  oppres 
sion  and  illegitimate  pretensions  are  compatible  with  the  activity 
of  individuals  and  their  pursuit  of  well-being.  The  more  perfect 
are  civil  institutions,  the  more  is  liberty  extended ;  the  more  nume 
rous,  too,  are  the  occasions  for  men  to  exercise  their  own  minds, 
or  to  learn  to  assist  in  the  education  of  others.  In  all  places, 
therefore,  and  at  all  times,  liberty  and  civilization  have  issued 
from  cities;  witness,  in  antiquity,  Greece  and  Italy;  in  the 
middle  ages,  Italy,  Germany,  Belgium  and  Holland ;  later. 
England,  and  quite  recently,  North  America  and  France.  But 
there  are  two  kinds  of  cities ;  we  call  the  one  productive,  the 
other  consuming  cities.  There  are  cities  which  receive  and  work 
up  raw  materials,  making  payment  to  the  country  in  manufac 
tures,  and  so,  too,  for  the  food  which  they  need.  Such  are  manu 
facturing,  or  productive  cities.  Their  prosperity  makes  the 
prosperity  of  agriculture,  and  they  increase  in  proportion  as 
agriculture  expands  its  resources.  There  are  also  cities,  where 
those  reside  who  consume  the  fruit  or  the  rent  of  the  land.  In 
any  partially  cultivated  country,  a  great  portion  of  the  product 
of  the  land  is  consumed  in  cities  in  the  shape  of  rents.  It  would 
be  erroneous  to  maintain,  as  a  general  rule,  that  such  consump 
tion  is  prejudicial  to  production,  or  even  not  useful  to  it ;  for  the 
possibility  of  securing  independence  by  an  income  from  land,  is 
a  powerful  stimulus  to  economy,  to  saving  in  agriculture,  and 
to  agricultural  improvements.  Moreover,  emulous  of  distinction 
among  his  countrymen,  the  proprietor  of  land,  favored  by  edu 
cation,  and  the  independence  of  his  position,  affords  important 
assistance  to  civilization,  to  public  institutions,  to  the  adminis 
tration  of  the  state,  to  the  arts  and  sciences.  The  degree  of 
influence  which  rent  exercises  upon  the  industry,  property  and 
civilization  of  a  country,  always  depends  upon  the  greater  or 
less  degree  of  liberty  enjoyed  by  the  country.  The  desire  of 
being  useful  to  society  by  voluntary  activity,  and  of  becoming 
distinguished  among  our  fellow-citizens,  is  only  developed  in 
those  nations  where  such  activity  produces  gratitude,  public  con 
sideration  and  reward ;  but  not  among  those  where  the  ambition 
of  public  esteem  and  independence  of  authority  are  looked  at 
19 


290  THEORY. 

with  distrust.  ^  Among  such  as  these,  proprietors  will  rather 
give  themselves  to  debauchery  or  idleness;  by  thus  showing 
contempt  for  useful  activity,  they  injure  morals,  nay,  even  sap 
the  very  .principles  oT  the  productive  power  of  the  country.  If 
their  consumption* encourages  to  a  certain  degree  the  manu 
factures  -of- cilj.es \,, such  manufactures  may  be  regarded  as  decay 
ing  and  jporfelprig  industries  ;  they  can  give  but  little  aid  to  the 
develop'mjent'  oi  the  civilization,  prosperity  and  liberty  of  the 
country.  ;A"  sound  manufacturing  industry,  in  which  these  rents 
are  invested,  producing  liberty  and  civilization,  may  be  said  to 
be  a  fund  reclaimed  from  idleness,  debauchery  and  immorality, 
and  converted  into  a  fund  of  intellectual  production,  which  soon, 
of  course,  transforms  merely  consuming  into  productive  cities. 

Another  resource  of  consuming  cities  consists  in  the  consump 
tion  of  public  officers,  and  of  the  administration  in  general. 
Consumption  of  this  kind  may  give  to  a  city  an  aspect  of  pros 
perity;  but  the  question  whether  it  is  useful  or  hurtful  to  the 
productive  power  of  the  country,  to  its  prosperity,  its  institu 
tions,  depends  on  the  good  or  bad  influence  of  the  functions 
fulfilled  by  the  consumers. 

This  explains  why,  in  purely  agricultural  States,  there  may 
be  large  cities  which,  though  containing  a  considerable  number 
of  rich  men,  and  a  variety  of  industries,  have  but  an  inappre 
ciable  influence  on  the  civilization,  the  liberty,  and  the  productive 
force  of  the  country.  Tradesmen  almost  invariably  partake  of 
the  opinions  of  their  employers  and  customers.  They  are  but 
the  servants  of  proprietors  and  public  functionaries.  At  the 
side  of  great  luxury  in  such  cities  are  found  narrowness  of  mind, 
blunted  feelings,  boorish  tastes,  poverty  and  misery  among  the 
inhabitants  of  the  country.  Manufactures  generally  exert  a 
salutary  influence  upon  the  improvement  of  public  institutions, 
upon  the  liberty  and  civilization  of  nations,  wherever  they  are  car 
ried  on  among  the  masses  of  a  rural  population,  independent  of 
owners  and  public  officers,  whether  the  articles  manufactured  be 
for  their  consumption,  or  they  furnish  food  and  raw  materials  for 
the  manufacturer. 

In  proportion  as  that  beneficial  manufacturing  industry  be- 


MANUFACTURING    INDUSTRY.  291 

comes  more  firmly  established,  the  supply  of  its  wants  will 
furnish  a  new  increasing  market  for  the  agricultural  products 
required,  and  all  the  offices  of  governmenJ^aJQiLall  the  institu 
tions  of  society,  will  feel  the  advantage  thus  c\$^^iiaipon  the 
proprietors  of  the  soil.  Consider  a  lar^^fcj^  ^Hier^jK^nufac- 
turers  are  numerous,  independent,  patrio^^-v^fl^edtt^fl^  and 
rich,  where  merchants  have  the  same  in^^ts^?4>J^|same 
advantages,  where  proprietors  are  under  t&i^npc£&py  ojf  con 
ciliating  public  esteem,  where  official  personage*u-5ue<r  under 
the  control  of  public  opinion,  where  men  of  learning  and  artists 
devote  their  time  and  talents  to  please  the  public  at  large,  and 
are  dependent  upon  that  public  for  the  means  of  subsistence ; 
consider  the  mass  of  intellectual  and  material  resources  accu- 
mufated  within  such  narrow  space ;  observe  the  intimate  union 
existing  between  that  mass  of  forces  under  the  law  of  division 
of  labor  and  the  association  of  productive  powers ;  notice  the 
quickness  of  every  amelioration,  of  every  degree  of  progress  in 
public  institutions,  and  in  the  economical  and  social  condition 
of  the  people ;  how  quickly,  also,  every  retrograde  step,  every 
blow  at  the  general  interests,  is  felt  throughout  the  whole  com 
munity  ;  reflect,  how  easy  it  is  for  a  population  residing  in  the 
same  vicinity  to  act  in  concert  for  common  purposes  and  by 
common  measures,  and  how  many  resources  they  can  instantly 
command ;  see  what  close  relations  a  community  so  powerful,  so 
intelligent,  so  attached  to  its  liberty,  sustains  with  other  similar 
communities  of  the  same  country ;  weigh  all  this,  and  you  will 
be  easily  convinced  that,  in  comparison  with  cities,  the  whole 
power  of  which,  as  we  have  shown,  reposes  upon  the  prosperity 
of  manufactures  and  commerce,  a  rural  population,  however 
large,  scattered  over  the  whole  surface  of  the  country,  can  have 
but  little  influence  on  the  preservation  and  the  improvement  of 
public  institutions. 

The  paramount  influence  of  cities  upon  the  political  and  civil 
government  of  a  nation,  far  from  being  injurious  to  the  in 
habitants  of  the  country,  is  the  source  of  innumerable  advan 
tages.  The  interest  of  cities  induces  them  to  invite  the  occupiers 
of  the  soil  to  partake  of  their  liberty,  their  culture,  and  pros- 


292  THEORY. 

perity ;  for,  the  more  these  intellectual  advantages  are  enjoyed 
by  a  country  population,  the  larger  will  be  the  quantity  and 
variety  of  food  and  raw  materials  furnished  to  the  cities,  and 
of  course  the  larger  the  product  of  manufactured  goods,  and 
the  greater  and  firmer  the  prosperity  of  the  cities.  The  country 
receives  from  the  cities  energy,  intelligence,  liberty,  and  civili 
zation  ;  but  cities  secure  their  liberties,  their  institutions,  and 
their  wealth,  by  inducing  the  people  of  the  country  to  par 
ticipate  in  them.  Agriculture,  which  had  hitherto  produced 
only  masters  and  servants,  under  this  system  brings  forth  for 
society  the  most  independent  and  the  stoutest  champions  of  its 
liberty.  Rural  economy  begins  then  to  be  self-sustaining  and 
self-expanding ;  the  laborer  can  rise  to  the  rank  of  a  tenant,  the 
tenant  to  the  rank  of  a  farmer.  Capital,  as  well  as  the  means 
of  transport,  which  manufacturing  industry  requires  and  estab 
lishes,  encourage  the  application  of  labor  to  the  soil.  Feudal 
servitude,  rights,  laws  and  institutions,  restrictive  of  labor  and 
liberty,  disappear.  The  owner  of  the  land  receives,  then,  a 
revenue  a  hundred-fold  greater  from  his  timber  than  from  his 
hunting-grounds.  Those  who  under  the  sad  regime  of  enforced 
feudal  labor  were  hardly  able  to  secure  the  rudest  living  in  the 
country,  whose  only  gratification  consisted  in  keeping  horses 
and  dogs  to  race  and  to  hunt ;  who  of  course  desired  that  every 
one  disturbing  them  in  their  enjoyments  should  be  punished  for 
an  attack  upon  their  seignorial  rights,  became,  by  the  increase 
of  their  income,  by  the  product  of  free  labor,  enabled  to  live  a 
part  of  the  year  in  cities.  There,  society  and  music,  reading, 
and  the  cultivation  of  a  taste  for  the  arts,  soften  their  manners. 
There,  by  association  with  the  learned  and  accomplished,  they 
are  taught  to  appreciate  mind  and  talents.  From  Nimrods  as 
they  were,  they  become  civilized  men.  The  aspect  of  an  indus 
trious  community,  in  which  every  one  is  endeavoring  to  improve 
his  condition,  awakens  also  in  them  a  taste  and  spirit  of  im 
provement.  Instead  of  chasing  stags  and  hares,  they  join  in 
the  pursuit  of  knowledge,  and  hunt  new  ideas.  On  their  return 
to  the  country,  they  carry  to  farmers  and  tenants  useful  instruc- 


MANUFACTURING,   INDUSTRY.  293 

tion  and  examples,  and  secure  their  esteem  in  place  of  their 
maledictions. 

In  proportion  as  industry  and  agriculture  flourish,  the 
human  mind  is  freed  from  its  chains,  tolerance  gains  ground, 
sound  morals  and  true  religious  sentiment  take  the  place  of  con 
straint  of  conscience.  Wherever  industry  has  exerted  itself  in 
hehalf  of  tolerance,  the  priest  has  become  a  teacher  of  the  peo 
ple  and  a  lettered  man.  Language  and  literature,  the  fine  arts 
and  civil  institutions,  have  always  kept  even  pace  with  manufac 
tures  and  commerce. 

Manufactures  enable  a  nation  to  trade  with  less  cultivated 
people,  to  increase  its  mercantile  navigation,  to  become  a  mari 
time  power,  and  to  employ  its  surplus  of  population  in  the 
settlement  of  colonies,  which  promote  its  prosperity  and  power. 

Comparative  statistics  evince  that  a  territory  sufficiently  ex 
tended  and  fertile,  in  which  manufactures  and  agriculture  are 
completely  and  harmoniously  developed,  can  support  a  popula 
tion  three  times  larger,  and  incomparably  more  prosperous,  than 
a  country  exclusively  employed  in  agriculture.  Hence,  it  fol 
lows,  that  all  the  intellectual  forces  of  a  nation,  the  income  of 
the  State,  the  material  and  moral  resources  for  defence,  the 
guarantees  of  national  independence,  augment  in  like  propor 
tion,  where  a  nation  enjoys  an  active  manufacturing  industry. 

In  a  period  when  art  and  mechanics  exert  so  great  an  influence 
upon  the  conduct  of  war,  when  all  military  operations  depend, 
in  such  an  important  degree,  upon  the  state  of  the  public  trea 
sury,  when  the  defence  of  the  country  is  more  or  less  secured, 
according  as  the  mass  of  the  population  is  rich  or  poor,  intelli 
gent  or  stupid,  energetic  or  apathetic,  according  as  its  sympa 
thies  are  given  without  reserve  to  the  country,  or  partly  devoted 
to  foreign  interests,  according  as  it  can  arm  more  or  fewer  sol 
diers  ;  above  all,  in  such  circumstances,  and  at  such  a  time, 
should  manufactures  be  regarded  and  cherished  for  their  politi 
cal  importance. 


294  THEORY. 


CHAPTER   VIII. 

MANUFACTURING  INDUSTRY,  AND  THE  NATURAL  PRODUCTIVE 
FORCES  OF  A  COUNTRY. 

IN  proportion  as  man  advances  in  civilization,  he  knows  better 
how  to  take  advantage  of  the  natural  forces  placed  within  his 
reach,  and  his  sphere  of  action  is  enlarged. 

The  hunter  does  not  use  the  thousandth  part,  the  shepherd 
not  the  hundredth  part,  of  the  forces  of  nature  by  which  each  is 
surrounded.  Neither  sea  nor  foreign  climes  furnish  them  with 
articles  of  consumption,  nor  implements  of  labor,  nor  stimu 
lants,  or  at  least  they  furnish  a  quantity  so  unimportant  as  to 
be  wholly  insignificant. 

In  an  imperfect  agriculture,  a  great  part  of  the  forces  of  nature 
remain  unemployed ;  the  man  always  confines  his  intercourse  to 
his  immediate  neighborhood.  Water  and  wind  are  hardly  used 
as  motive  powers ;  minerals  and  lands  of  various  kinds,  to  which 
manufacturers  know  how  to  give  so  great  a  value,  are  neglected ; 
fuel  is  wasted,  or,  as  turf  for  instance,  is  regarded  as  an  obstacle 
to  culture ;  stones,  sand,  and  lime,  are  rarely  employed  in 
building ;  in  place  of  bearing  burdens  confided  to  them  by  the 
inhabitants,  or  of  enriching  the  neighboring  fields,  rivers  and 
streams  of  water  waste  their  power  and  carry  off  the  soil.  The 
inhabitants  of  such  a  country  enjoy  but  seldom  the  products  of 
the  sea  or  of  the  torrid  zone. 

Even  the  principal  natural  power,  the  productive  force  of  the 
earth,  is  made  available  to  a  very  small  extent,  so  long  as  agri 
culture  is  not  sustained  by  manufacturing  industry. 

In  a  purely  agricultural  state,  each  district  must  produce  all 
it  wants  ;  for  it  can  neither  freely  send  its  surplus  of  products 
to  others,  nor  draw  from  others  additional  supplies.  However 
fertile  each  region  may  be,  however  fitted  for  the  culture  of 
oleaginous  plants,  for  vegetable  tinctures,  or  for  pasture,  each  must 


MANUFACTURING    INDUSTRY.  295 

grow  its  own  wood  for  fuel,  for  mineral  fuel  cannot  be  ob 
tained  from  mines,  or  distant  mountains  over  bad  roads,  but  at 
a  cost  which  cannot  be  borne.  The  land  which  would  yield  in 
vineyard  or  in  horticulture  three  or  four  times  more,  must  re 
main  in  the  culture  of  grain  and  grass.  He  who  prefers  confining 
himself  to  breeding  cattle,  is  obliged  also  to  fatten  them ;  and 
he  who  prefers  to  confine  himself  to  fattening  cattle  is  compelled 
to  breed  them.  However  profitable  it  may  be  to  employ  mineral 
manure,  such  as  plaster,  lime,  or  marl,  or  to  burn  peat  and  coal 
instead  of  wood,  the  want  of  means  of  transportation  checks, 
if  it  does  not  prevent,  all  enterprises  and  efforts  having  any 
thing  in  view  beyond  the  narrow  circle  of  such  a  district.  How 
ever  rich  a  product  of  grass  the  valleys  might  yield  if  irrigation 
upon  a  large  scale  were  introduced,  the  streams  only  serve  for 
the  abrasion  and  removal  of  a  fertile  soil. 

When  manufacturing  industry  takes  root  in  an  agricultural 
country,  roads  are  made,  railroads  constructed,  canals  are 
dug,  rivers  made  navigable,  lines  of  steamboats  established. 
Not  only  do  the  surplus  products  of  the  cultivator  find  ready 
access  to  market,  but  become  a  sure  source  of  income ;  not  only  is 
the  labor  already  employed  made  more  active  and  available,  but 
the  rural  population  is  enabled  to  draw  from  their  previously 
neglected  resources  a  large  income,  and  to  bring  into  immediate 
and  profitable  use  all  the  minerals  and  all  the  metals  buried  in 
the  earth.  Materials  formerly  transportable  only  a  few  miles, 
such  as  salt,  coal,  marble,  slates,  lime,  plaster,  wood,  bark,  etc., 
can  then  be  distributed  over  the  whole  surface  of  a  large  country. 
Articles  hitherto  of  no  value  take  far  higher  rank  in  the  statistics 
of  the  production  of  the  country,  than  the  whole  previous  income 
of  its  agriculture.  The  time  comes  when  not  a  cubic  inch  of 
water-power  is  permitted  to  go  unemployed;  and  even  in  the 
most  remote  parts  of  the  country,  timber  and  various  fuels, 
hitherto  inaccessible  and  without  value,  are  brought  into  use 
and  made  vendible  commodities. 

Manufactures  create  a  demand  for  a  multitude  of  articles 
besides  raw  materials,  to  which  a  portion  of  the  soil  may  be 
devoted  with  greater  profit  than  in  the  production  of  grain, 


296  THEORY. 

usually  the  chief  crop  of  purely  agricultural  countries.  The 
demand  for  milk,  butter,  and  meal,  to  which  such  a  change 
gives  rise,  increases  the  value  of  the  land  previously  used  for 
pasture,  improves  the  methods  of  culture,  and  promotes  the 
practice  of  drainage ;  and  the  demand  for  vegetables  and  fruits 
transforms  fields  into  gardens  or  orchards.  The  loss  sustained 
by  a  purely  agricultural  country  from  not  using  its  natural 
resources  is  greater,  in  proportion  as  nature  has  more  largely 
endowed  it  for  manufactures,  and  as  its  territory  is  richer  in 
raw  materials  and  natural  power,  specially  useful  to  manufac 
turing  industry;  it  is  so,  especially  for  hilly  or  mountainous 
regions,  less  suited  to  culture  on  a  large  scale,  but  which  offer 
to  other  branches  of  industry,  water-power,  minerals,  wood,  and 
stone  in  abundance,  and  to  farmers  and  others,  facilities  for 
importing  or  producing  articles  which  manufacturers  require. 

The  temperate  zone  is  appropriate  for  factories  and  manufac 
tures,  and  is  almost  the  only  one  that  does  suit  them.  A 
moderate  temperature  is  much  more  favorable  than  either 
extreme  to  the  development  and  use  of  power.  But  the  rigor  of 
winter,  in  which  the  superficial  observer  sees  only  the  sternest 
aspects  of  nature,  powerfully  encourages  habits  of  labor,  fore 
sight,  order,  and  economy.  A  man  who,  for  six  months,  can 
obtain  nothing  from  the  ground,  and  who,  nevertheless,  needs  a 
certain  store  of  food  for  himself  and  his  cattle,  clothing  and 
provision  for  his  family,  with  protection  from  the  weather,  cannot 
fail  to  become  much  more  industrious  and  more  saving  than  one 
who  needs  only  protection  from  rain,  and  who  lives  through  the 
year  in  abundance.  It  is  necessity  which  produces  assiduous 
attention  to  labor:  economy,  order,  foresight,  habit  and  educa 
tion,  make  them  afterwards  a  second  nature.  Labor  and 
economy  go  hand  in  hand  with  morality,  just  as  idleness  and 
dissipation  with  immorality :  the  former  are  an  abundant  source 
of  power,  the  latter  are  fruitful  sources  of  decay  and  weakness. 

A  purely  agricultural  region  in  a  temperate  clime  permits,  of 
course,  the  best  portion  of  its  natural  resources  to  remain  unem 
ployed. 

From  not  distinguishing  between  agriculture  and  manufac- 


MANUFACTURING    INDUSTRY.  297 

turing  industry  in  the  appreciation  of  the  influence  of  climate 
upon  production  of  wealth,  the  School  has  fallen,  in  regard  to 
the  advantages  and  the  disadvantages  of  protective  measures, 
into  important  errors,  upon  which  we  cannot  avoid  enlarging, 
though  we  have  already  indicated  them  elsewhere  in  general 
terms. 

To  prove  that  it  would  be  foolish  to  produce  everything  in 
any  one  country,  the  School  asks  if  it  would  be  reasonable  in 
England  or  Scotland  to  think  of  producing  wine  in  hot-houses. 
Wine  could  no  doubt  be  thus  obtained,  but  it  would  neither  be 
so  good  nor  so  cheap  as  that  which  England  and  Scotland  can 
purchase  by  means  of  their  manufactured  products.  For  those 
who  will  not  or  cannot  look  more  deeply  into  the  real  nature  of 
things,  the  argument  is  plausible ;  and  the  School  is  indebted  to 
it  for  a  great  part  of  its  popularity,  at  least  among  the  propri 
etors  of  vineyards  and  silk  manufactories  in  France,  as  well  as 
among  planters  of  cotton  and  traders  in  that  article  in  North 
America.  But  examined  closely,  the  illustration  is  without 
force,  for  the  reason  that  restrictions  operate  in  agriculture  alto 
gether  differently  from  what  they  do  in  manufacturing  industry. 

Let  us  first  notice  their  effects  upon  agriculture. 

Let  France  repel  from  her  frontier  German  cattle  and  corn, 
and  what  would  be  the  result  ?  First,  Germany  would  cease  to 
purchase  French  wines,  and  France  would  then  derive  so  much  less 
advantage  from  that  portion  of  her  lands  which  are  devoted  to 
the  culture  of  wine.  Fewer  individuals  would  confine  themselves 
to  that  culture,  and  consequently  a  less  quantity  of  domestic 
food  would  be  required  for  the  consumption  of  the  cultivators 
of  the  vine.  The  same  would  take  place  respecting  the  produc 
tion  of  oil.  France  would  then  lose  much  more  in  other 
branches  of  her  agricultural  industry  than  she  could  save  in  a 
single  department  by  favoring  the  prohibition  of  German  cattle 
which  do  not  spring  up  spontaneously,  and  which  are  very  likely 
not  more  advantageous  for  the  regions  in  which  their  production 
is  thus  artificially  forced. 

Such  will  be  the  results  if  we  regard  France  and  Germany  as 
merely  agricultural  countries,  and  if  we  suppose  that  Germany 


298  THEORY. 

will  not  retaliate.  But  such  a  policy  must  appear  still  more 
injurious  if  we  consider  that  Germany,  under  the  imperative 
law  of  her  own  interest,  will  also  have  recourse  to  restrictive 
measures^  and  that  France  is  engaged  in  both  manufactures  and 
agriculture.  Germany  would  impose  higher  duties,  not  only 
upon  wine,  but  upon  other  French  agricultural  products  which 
she  might  produce  herself,  or  which  she  could  more  or  less  do 
without,  and  which,  in  fine,  she  could  obtain  from  other  places ; 
moreover,  she  would  impose  still  heavier  duties  upon  the  importa 
tion  of  manufactures  which  cannot  be  produced  there  with 
benefit,  but  which  can  be  obtained  elsewhere  without  recourse  to 
France.  Thus  the  damage  which  France  would  sustain  by  re 
striction  is  twice  or  three  times  more  considerable  than  the 
advantage  gained.  The  culture  of  the  vine,  of  the  olive,  and 
manufacturing  industry,  can  employ  in  France  only  as  many 
individuals  as  the  food  and  raw  materials  produced  or  imported 
by  France  can  nourish  and  supply.  Now  we  have  seen,  that 
restrictions  upon  importation  do  not  increase  agricultural  produc 
tion,  but  only  transfer  it  from  one  part  of  the  country  to 
another.  Had  a  free  career  been  left  to  the  trade  in  these 
rival  products,  the  importation  of  these  products,  and  conse 
quently  the  exportation  of  wine,  oil,  and  manufactured  goods, 
would  have  constantly  increased,  as  well  as  the  population  em 
ployed  in  the  culture  of  the  vine,  and  of  the  olive,  and  in  manu 
factures,  since,  on  the  one  hand,  food  and  raw  materials  would 
have  been  received  in  always  increasing  quantities,  and  on  the 
other,  the  demand  for  their  own  products  would  have  been  also 
increasing.  The  increase  of  that  population  would  have  excited 
a  greater  demand  for  food  and  raw  materials,  articles  less  easily 
imported  from  abroad,  and  of  which  agriculture  in  every  land 
possesses  a  natural  monopoly ;  the  agriculture  of  the  country 
would  of  course  in  these  circumstances  have  realized  still  greater 
profits.  The  demand  for  such  agricultural  products  as  are 
suited  to  the  soil  of  France,  would,  under  this  regime  of 
liberty,  be  much  greater  than  that  which  has  been  artificially 
created  by  restrictions.  One  farmer  would  not  have  lost  what 
another  has  gained ;  the  whole  agriculture  of  the  country  would 


MANUFACTURING    INDUSTRY.  299 

have  gained  something,  and  its  manufacturing  industry  still 
more.  Thus  restriction  has  not  increased,  but  has  rather  di 
minished  the  agricultural  power  of  the  country,  and  it  has  more 
over,  annihilated  that  manufacturing  power  which  results 
from  the  development  of  the  agriculture  of  the  country,  and 
from  the  importation  of  raw  materials  from  abroad.  The  only 
thing  obtained  by  it  was  an  increase  of  prices  for  the  advantage 
of  the  cultivators  of  one  place,  at  the  expense  of  those  of  an 
other,  and  especially  at  the  cost  of  the  general  productive  power 
of  the  country. 

The  inconveniences  of  these  restrictions  to  the  trade  in  agri 
cultural  products,  are  still  more  apparent  in  England  than  in 
France.  The  corn-laws  have  induced,  it  is  true,  the  bringing 
into  culture  of  a  vast  extent  of  inferior  lands ;  but,  it  may  be 
asked,  would  not  these  lands  have  been  cultivated  without  them  ? 
The  more  wool,  timber,  cattle,  and  grain,  England  imported,  the 
larger  the  sale  of  her  manufactured  articles,  the  more  men  she 
could  maintain  in  her  work-shops  and  manufactories,  and  the 
better  the  condition  of  her  industrial  classes.  England  might 
thus  have  doubled  the  number  of  her  workmen.  Each  one  of 
these  might  have  had  a  better  lodging,  a  garden  for  his  recrea 
tion  and  the  wants  of  his  household,  and  might  thus  have  main 
tained  himself  and  family  in  greater  comfort  and  abundance. 
It  is  evident  that  such  a  great  increase  of  the  numbers  and  well- 
being  of  the  laboring  population,  and  of  their  consumption, 
must  create  an  enormous  demand  for  those  articles  of  which 
the  country  possesses  a  natural  monopoly,  and  it  is  more  than 
probable  that  two  or  three  times  more  land  would  be  brought 
into  culture  in  such  circumstances,  than  has  been  the  case  with 
the  aid  of  restriction ;  the  evidence  of  it  may  be  seen  in  the 
neighborhood  of  any  large  city.  However  large  the  quantity 
of  commodities  which  it  may  bring  from  a  distance,  there  will 
not  be  found  within  a  mile  a  single  spot  of  uncultivated  land, 
however  few  the  advantages  nature  may  have  bestowed  upon  it. 
Should  the  importation  of  grain  from  distant  countries  be  pro 
hibited,  it  would  diminish  the  population,  its  industry,  and  pros- 


300  THEORY. 

perity ;  and  the  farmers  of  the  vicinity  would  be  compelled  to 
adopt  less  advantageous  modes  of  culture. 

It  is  obvious  that,  in  this  respect,  we  agree  perfectly  with  the 
ruling  theory.  As  to  agricultural  products,  the  School  is  quite 
,  right  in  maintaining  that  the  fullest  liberty  of  trade  is  beneficial 
in  all  cases  to  both  individuals  and  to  nations.  Production  may, 
indeed,  be  promoted  by  restrictions,  but  the  advantage  thus  ob 
tained  is  only  apparent.  In  fact,  such  measures,  according  to 
the  language  of  the  School,  only  give  a  wrong  direction  to 
capital  and  labor.  But  manufacturing  industry  obeys  other 
laws,  and  unfortunately  the  School  has  not  been  aware  of  it.* 

*  We  have  here  no  sufficient  explanation  why  the  protective  system 
•*  which  in  List's  view  is  so  applicable  to  manufacturing  industry,  is  so  inju 
rious  to  agriculture ;  why  these  two  great  branches  of  industry  should,  in 
like  circumstances,  be  subject  to  different  laws ;  why  free  trade  is  sufficient 
for  agriculture,  and  is  even  indispensable  to  it,  whilst  manufactures  cannot 
do  without  protection ;  why,  finally,  the  same  arguments  of  the  School, 
which  are  worthless  in  the  one  case,  are  excellent  in  the  other. 

Whatever  be  the  product,  crude  or  manufactured,  of  which  the  law  re 
strains  the  importation,  the  effects,  good  or  bad,  must  always  be  the  same. 
A  temporary  loss  of  values  always  ensues  ;  the  question  will  then  be,  whe 
ther  that  loss  will  be  made  good,  according  to  the  expression  of  List,  by 
the  increase  of  the  productive  forces.  But  does  the  acquisition  of  a  great 
rural  industry  augment  the  productive  power  of  a  country  in  a  less  degree 
than  that  of  a  great  manufacturing  industry? 

According  to  List,  agriculture,  in  its  primitive  state,  is  powerfully  ex 
cited  by  foreign  commerce;  afterwards  it  must  receive  its  next  impulse 
from  manufactures.  But  if  the  prosperity  of  manufacturing  industry  reacts 
favorably  upon  agriculture,  ought  not  the  prosperity  of  agriculture  to  react 
as  favorably  upon  manufacturing  industry  ?  May  not  a  nation  have  a  great 
interest  in  establishing  a  new  rural  industry,  or  in  resuming  an  old  one, 
which  war  or  other  causes  has  for  a  time  weakened  or  destroyed  ?  Why 
should  not  the  nation  sustain  such  an  industry  in  its  infancy,  the  same  as 
it  would  the  first  steps  of  a  manufacturing  industry  ? 

In  theory,  protective  duties  should  no  more  be  denied  to  agriculture  than 
to  manufactures.  It  must  be  admitted  that  it  should  be  dispensed  with 
somewhat  more  caution.  Agriculture  is  not  exposed  to  the  same  vicissi 
tudes,  nor  to  the  same  perils ;  it  is  more  frequently  protected  by  nature, 
which  has  reduced  competition  in  agricultural  products  to  a  very  few  com 
petitors.  These  products  are  to  be  obtained  in  limited  quantities,  regard 


MANUFACTURING  INDUSTRY.        801 

If,  as  we  have  seen,  restrictions  upon  the  importation  of  agri 
cultural  products  are  prejudicial  to  the  employment  of  capital  and 
the  powers  of  nature,  restrictions  upon  the  importation  of  manu 
factured  products  in  a  country  populous  and  well  advanced  in  its 
agriculture  and  civilization,  bring  to  life  and  activity  a  multitude 
of  the  forces  of  nature,  which,  in  a  purely  agricultural  country, 
remain  otherwise  inactive  and  dead.  If  restrictions  upon  the 
importation  of  agricultural  products  arrest  the  development  of 
productive  power,  not  only  in  manufacturing  industry,  but  even 
in  agriculture ;  manufacturing  industry  established  in  a  country 
by  the  aid  of  restrictions  on  manufactured  products,  animates 
all  rural  industry  much  more  than  the  most  active  commerce 
with  foreign  parts.  If  the  importation  of  agricultural  products 
makes  foreigners  dependent  upon  us,  and  takes  from  them  the 
means  of  manufacturing  for  themselves,  we  become  by  the  im 
portation  of  foreign  manufactured  products,  dependent  upon 
foreigners,  and  give  up  the  means  of  becoming  manufacturers 
ourselves.*  If  the  importation  of  food  and  raw  materials  takes 
from  foreigners  what  is  needed  to  feed  and  employ  their 
population,  the  importation  of  manufactured  goods  deprives  us 
of  the  power  of  increasing  our  population,  and  of  giving  them 
labor.  If  the  importation  of  food  and  raw  materials  extends 
the  influence  of  our  country  over  the  world,  and  furnishes  us 
the  means  of  trading  with  all  other  nations,  the  import  of  manu-  / 
factured  products  subjects  us  to  the  yoke  of  more  advanced 
manufacturing  nations,  which  use  us  for  their  own  benefit,  as 
England  uses  Portugal.  In  a  word,  history  and  statistics  prove 
the  justness  of  the  maxim  found  in  a  document  of  the  ministers 

being  had  to  men's  wants ;  and  the  transportation  is  both  difficult  and  ex 
pensive 

The  opinion  of  the  author  was  not,  besides,  so  positive  as  it  appears 
here.  Since  the  work  has  been  in  the  press,  I  have  seen  a  production  of 
List  published  in  1846,  in  which  he  remarks  at  some  length  upon  my  book, 
Association  Douaniere  Allemande,  (German  Customs  Association.)  In  reply 
to  the  reproach  which  I  had  addressed  to  him  of  denying  protection  to 
agriculture,  he  says  that  he  allows  to  this  general  rule  exceptions  which  he 
had  not  specified  in  his  National  Economy.  —  [H.  R.] 

*  Spirit  of  Laics,  Book  XX.,  Chap.  XXIII. 


302  THEORY. 

of  George  I.,  that  nations  are  richer  and  more  powerful  in  pro 
portion  as  they  export  more  manufactured  articles,  and  import 
more  food  and  raw  materials.  It  can  be  shown  that  entire  na 
tions  have  perished  by  pursuing  the  policy  of  exporting  food  and 
raw  materials,  and  importing  manufactured  articles. 

Montesquieu,  than  whom  no  one,  before  or  after  him,  better 
understood  the  lessons  of  history  to  legislators  and  statesmen, 
has  fully  recognised  this  truth,  although  political  economy  was 
not,  in  his  time,  sufficiently  developed  to  enable  him  to  demon 
strate  it  clearly.  In  opposition  to  the  chimerical  system  of  the 
Physiocrats,  he  maintained  that  Poland  would  have  been  happier 
if  she  had  completely  renounced  foreign  commerce ;  that  is,  if  she 
had  created  a  home  manufacturing  industry,  working  up  her 
own  raw  materials,  and  consuming  her  own  food. 

It  was  only  by  the  development  of  manufactures,  by  means 
of  free,  populous,  and  industrious  cities,  that  Poland  could 
secure  a  strong  interior  organization,  an  active,  a  national 
industry,  the  enjoyment  of  liberty  and  wealth ;  that  she  could 
preserve  her  independence,  and  maintain  her  political  influence 
over  the  less  cultivated  nations  in  her  neighborhood.  Instead 
of  manufactured  products,  she  ought  to  have  imported  from 
foreign  parts  manufacturers  and  capital,  just  as  England  did  at 
at  a  period  when  she  was  in  a  similar  stage  of  culture.  But  the 
Polish  nobles  preferred  to  send  abroad  the  laborious  product 
of  the  labor  of  her  serfs,  and  to  clothe  themselves  in  fine  and 
cheap  foreign  stuffs.  Their  posterity  can  better  answer  the 
question  whether  a  nation  should  be  advised  to  purchase  the 
products  of  foreign  factories,  whilst  their  own  manufacturers 
were  unable  to  compete  with  the  latter  in  price  and  quality. 
Let  the  nobility  of  other  countries  remember  their  fate  whenever 
they  are  seized  with  the  desire  of  feudal  ascendency;  let  them 
further  cast  a  glance  at  the  English  nobility,  and  learn  how 
many  advantages  manufacturing  industry,  free  citizens,  and 
opulent  cities,  procure  for  the  proprietors  of  large  estates. 

Without  inquiring  whether  the  elective  kings  of  Poland  were 
able  to  introduce  a  commercial  system  similar  to  that  gradually 
established  by  the  hereditary  kings  of  England,  let  us  suppose 


MANUFACTURING    INDUSTRY.  303 

it  had  been  introduced  in  reality ;  is  it  not  easy  to  perceive  what 
beautiful  fruits  such  a  system  would  have  borne  for  Polish 
nationality?  Under  the  influence  of  great  and  industrious 
cities,  royalty  would  have  become  hereditary,  the  nobility  would 
have  consented  to  form  a  House  of  Lords  and  to  emancipate 
their  serfs  ;  agriculture  would  have  been  improved  as  in  England, 
the  Polish  nobility  would  be  now  rich  and  honored.  Poland,  if 
not  enjoying  as  much  respect  as  England,  if  not  exercising  as 
great  an  influence  in  the  world,  would  have  been  long  since 
civilized  and  powerful  enough  to  extend  her  influence  over  the 
less  civilized  nations  of  the  East.  Destitute  of  manufactures, 
she  is  dismembered,  and  even  if  she  were  not  already,  she  could 
not  escape  that  fate.  Of  her  own  accord  she  failed  to  become  a 
manufacturing  country ;  but  she  could  not  have  succeeded,  for  her 
efforts  would  always  have  been  paralyzed  by  nations  more  advanced 
in  that  industry.  Without  a  protective  system,  and  under  the 
rule  of  free  trade  with  more  advanced  nations,  even  if  she  could 
have  maintained  her  independence,  she  could  not  have  gone 
beyond  the  limits  of  an  imperfect  agriculture ;  she  could  not  have 
become  rich  and  powerful,  and  must  have  remained  without 
influence. 

The  fact  that  manufacturing  industry  transforms  into  pro 
ductive  capital,  wealth  and  national  powers,  explains  mainly 
why  protection  exerts  so  powerful  an  influence  upon  the  increase 
of  national  wealth.  The  prosperity  it  gives  is  not  a  deceptive 
appearance,  like  the  effect  of  restrictions  upon  agricultural  pro 
ducts  :  it  is  a  reality.  It  is  the  powers  of  nature  entirely  dead, 
wealth  of  nature  of  no  value  whatever,  which  an  agricultural 
people  awakes  to  life  and  brings  into  value  when  it  becomes  a 
manufacturing  nation. 

It  has  been  long  observed  that  man,  as  well  as  the  lower 
animals,  improves  intellectually  and  physically  by  cross-breeding, 
and  that  he  degenerates  gradually  when  marriages  constantly 
occur  among  a  small  number  of  families ;  so  with  plants  when 
the  seed  is  sown  constantly  in  the  same  soil.  The  knowledge 
of  this  natural  law  explains  why,  in  many  of  the  smaller  African 
and  Asiatic  tribes,  savages  or  half-civilized,  the  men  take  their 


304  THEORY. 

wives  from  other  tribes.  Experience  drawn  from  the  oligarchies 
in  small  municipal  republics,  who  constantly  intermarry,  die  off 
successively,  or  visibly  degenerate,  seems  to  me  another  evident 
proof  of  that  law  of  nature.  It  is  undeniable,  that  by  blending 
in  one  generation  two  diverse  races,  is  produced  almost  without 
exception  a  robust  and  beautiful  offspring;  and  this  observa 
tion  extends  even  to  the  mixture  of  whites  and  blacks  down  to 
the  third  and  fourth  generation.  It  is  on  this  account,  apparently, 
that  nations  issuing  from  often-repeated  mixtures,  embracing 
the  whole  population,  surpass  all  others  in  power  of  mind  and 
character,  in  vigor  of  constitution  and  bodily  beauty. 

Hence  we  conclude  that  men  are  not  necessarily  the  inactive, 
awkward,  low-minded  beings  we  find  under  the  regimen  of  an 
imperfect  agriculture,  such  as  we  find  in  small  villages,  where 
many  families  have,  during  centuries,  intermarried  with  each 
other,  where,  for  centuries,  no  one  has  thought  of  trying  an 
experiment  or  a  new  process,  of  changing  the  form  of  dress,  of 
adopting  any  new  instrument,  or  receiving  a  new  idea,  where 
the  climax  of  improvement  consists  not  in  any  display  of  intel 
lectual  or  physical  power,  but  in  the  ability  to  endure  the  greatest 
privations  possible. 

This  state  of  things  is  changed  to  the  great  benefit  of  the 
population  of  a  whole  country  by  introducing  manufacturing 
industry.  A  large  portion  of  the  increase  of  the  agricultu 
ral  population  being  thus  diverted  to  manufactures,  the  farmers 
of  different  localities  will  be  led  to  intermarry,  and  marriage 
will  also  take  place  between  the  manufacturing  and  agricultural 
population  to  their  reciprocal  advantage,  and  thus  the  moral, 
intellectual,  and  physical  apathy  of  the  inhabitants  will  be 
arrested.  The  intercourse  which  manufactures  and  trade,  to 
which  they  serve  as  a  basis,  establish  between  different  countries 
and  different  places,  infuses  new  life  into  the  veins  of  a  whole 
nation,  of  a  whole  community,  and  into  those  of  each  family. 

Manufacturing  industry  has  no  less  influence  on  the  improve 
ment  of  the  breed  of  domestic  animals.  Wherever  manufactures 
of  wool  have  flourished,  the  breed  of  sheep  has  rapidly  improved. 
The  great  number  of  laborers  employed  in  manufactures  creating 


MANUFACTURING    INDUSTRY.  305 

a  stronger  demand  for  good  meat,  the  farmer  will  endeavor  to 
introduce  better  breeds  of  horned  cattle.  A  more  active  demand 
for  fine  horses  induces  also  the  improvement  of  horses.  The 
old  races  degenerated  for  want  of  cross-breeding  disappear,  —  a 
degeneracy  which  belongs  to  a  defective  agriculture,  and  which 
makes  the  domestic  animals  the  true  counterpart  of  their  stupid 
masters. 

How  greatly  has  the  productive  power  of  nations  been  already 
indebted  to  the  introduction  of  foreign  animals  and  the  improve 
ment  of  indigenous  races,  and  how  much  yet  remains  to  be  done 
in  this  respect !  All  the  silk-worms  of  Europe  proceed  from 
eggs,  which,  in  the  reign  of  Constantine,  certain  Greek  monks 
carried  in  hollow  canes  to  Constantinople  from  China,  whence 
their  exportation  was  severely  prohibited.  France  is  indebted 
for  a  brilliant  industry  to  the  importation  of  the  Thibetian  goats. 
It  is  to  be  regretted,  that  in  the  introduction  of  foreign  races, 
or  the  improvement  of  the  indigenous  races,  attention  has  been 
chiefly  fixed  rather  upon  supplying  the  demands  of  luxury  than 
upon  promoting  the  well-being  of  the  masses.  Travellers  affirm 
the  existence,  in  certain  regions  of  Asia,  of  a  breed  of  horned 
cattle,  uniting  to  remarkable  strength  a  great  activity,  fitting 
them  equally  with  the  horse  for  burdens  and  for  draught.  What 
a  vast  advantage  would  such  a  race  prove  to  the  small  farmers 
of  Europe  and  elsewhere  !  What  increase  of  food,  of  productive 
power,  and  of  enjoyment,  would  not  the  working  classes  derive 
from  the  domestication  or  introduction  of  such  an  animal ! 

The  productive  power  of  mankind  is  increased  by  the  im 
provement  and  naturalization  of  plants  in  a  much  higher  degree 
than  even  by  the  improvement  and  naturalization  of  animals ; 
this  fact  will  be  seen  at  once,  if  we  compare  the  primitive  plants 
as  they  came  originally  from  the  bosom  of  nature  with  those 
improved.  How  little  do  the  primitive  grains,  fruits,  and  vege 
tables,  and  oil  plants,  resemble,  in  form  and  usefulness,  their 
improved  descendants !  What  resources  for  food,  what  enjoy 
ments  and  occasions  for  the  useful  employment  of  productive 
power,  have  they  not  furnished !  Potatoes,  beets,  turnips,  or 
artificial  meadows,  with  good  manures  and  good  implements  of 
20 


306  THEORY. 

husbandry,  have  increased  our  agricultural  product,  until  it  is 
ten-fold  greater  than  that  of  the  Asiatic  nations. 

Science  has  already  done  much  for  the  discovery  and  improve 
ment  of  new  plants  ;  but  in  this  important  branch  of  public 
economy,  governments  are  far  from  having  hitherto  devoted  to 
the  subject  all  the  attention  it  deserved.  It  has  been  asserted 
of  late,  that  in  the  prairies  of  America  new  kinds  of  grass  have 
been  discovered,  which  yield  upon  indifferent  soil,  a  greater 
return  than  the  usual  kinds  of  grass  upon  the  richest  lands.  It 
is  not  improbable  that  in  the  solitudes  of  America,  Africa,  Asia, 
and  Australia,  there  are  now  growing  a  multitude  of  plants 
without  any  value,  the  naturalization  and  improvement  of  which 
would  vastly  augment  the  industry  and  well-being  of  the  inhabi 
tants  of  the  temperate  zone.* 

It  is  evident  that  the  greater  part  of  the  improvements  and 
naturalizations  of  animals  and  vegetables,  as  well  as  the  greater 
part  of  the  progress  made  in  that  direction,  and  most  of  the 
discoveries  and  inventions,  chiefly  enure  to  the  benefit  of  the 
inhabitants  of  the  temperate  zone,  but  more  especially  to  those 
of  the  manufacturing  countries. 


CHAPTER   IX. 

MANUFACTURING  INDUSTRY,  AND  INSTRUMENTAL  FORCES, 
OR  THE  MATERIAL  CAPITAL  OF  A  COUNTRY. 

A  NATION  finds  its  productive  energy  in  the  moral  and  physical 
power  of  individuals,  in  its  civil  and  political  institutions,  in  the 
natural  resources  placed  at  its  disposal ;  finally,  in  the  instru 
ments  of  which  it  has  the  use,  and  which  are  themselves  the 
material  products  of  previous  efforts  of  body  and  mind,  that  is, 
products  of  previous  agricultural,  manufacturing,  and  commercial 
material  capital. 

*  Caoutchouc  and  Gutta  Percha  are  instances  of  what  can  be  done  with 
vegetable  productions  only  recently  made  known  to  industry.  —  [S.  C.] 


MANUFACTURING    INDUSTRY.  307 

We  have  treated,  in  the  two  preceding  chapters,  of  the  influ 
ence  of  manufactures  upon  the  first  three  of  these  sources  of 
the  productive  power  of  the  country ;  the  present  and  following 
chapter  will  be  devoted  to  their  influence  upon  the  latter. 

What  we  call  instrumental  forces,  is  called  by  the  School 
capital. 

It  may  not  be  important  what  word  is  employed  to  designate 
a  particular  object,  but  it  is  very  important  that  the  term  se 
lected  should  always  mean  the  same  thing,  and  that  it  should 
not  have  at  different  times  a  meaning  more  or  less  extended. 
Whenever  mention  is  made  of  different  species  of  the  same 
thing,  a  distinction  becomes  necessary.  Now,  by  the  term 
capital,  the  School  understands,  not  only  material,  but  also  all 
intellectual  and  social  means  of  production.  The  School  ought, 
of  course,  when  it  speaks  of  capital,  to  indicate  whether  it  in 
tends  material  capital  or  material  instruments  of  production,  or 
intellectual  capital,  or  capital  arising  from  moral  or  physical 
power ;  whether  this  power  be  personal,  or  whether  individuals 
find  it  in  the  civil  and  political  condition  of  society.  The 
omission  of  this  distinction  in  cases  where  it  ought  to  be  made, 
cannot  fail  to  lead  to  false  conclusions,  or  to  conceal  the  truth. 
As,  however,  we  have  less  at  heart  the  adoption  of  new  terms 
than  an  exposition  of  the  errors  committed  under  cover  of  an 
imperfect  terminology,  we  shall  use  the  word  capital,  distin 
guishing  between  intellectual  capital  and  material  capital ;  be 
tween  the  material  capital  of  agriculture,  of  manufactures,  and 
of  commerce ;  between  private  capital  and  national  capital. 

Adam  Smith,  by  the  aid  of  that  vague  expression  of  capital, 
brings  against  the  protective  system  the  following  argument, 
which  continues  in  use  to  this  day  among  all  his  disciples : — 

"  By  means  of  such  regulations,  indeed,  a  particular  manu 
facture  may  sometimes  be  acquired  sooner  than  it  could  have 
been  otherwise ;  and  after  a  certain  time  may  be  made  at  home, 
as  cheap  or  cheaper  than  in  the  foreign  country.  But  though 
the  industry  of  the  society  may  be  thus  carried  with  advantage 
into  a  particular  channel  sooner  than  it  could  have  been  other 
wise,  it  will  by  no  means  follow  that  the  sum  total,  either  of  its 


308  THEORY. 

industry  or  of  its  revenue,  can  ever  be  augmented  by  any  such 
regulation.  The  industry  of  society  can  augment  only  in  pro 
portion  as  its  capital  augments ;  and  its  capital  can  augment 
only  in  proportion  to  what  can  be  gradually  saved  out  of  its 
revenue.  But  the  immediate  effect  of  every  such  regulation  is 
to  diminish  its  revenue ;  and  what  diminishes  its  revenue  is  cer 
tainly  not  very  likely  to  augment  its  capital  faster  than  it  would 
have  augmented  of  its  own  accord,  had  both  capital  and  indus 
try  been  left  to  find  out  their  natural  employments."* 

In  support  of  this  argument,  the  founder  of  the  School  pro 
duces  the  illustration,  the  inapplicability  of  which  we  have 
already  shown,  of  producing  wine  in  Scotland. 

In  the  same  chapter  he  says  that  the  annual  revenue  of  so 
ciety  is  merely  the  exchangeable  value  of  the  yearly  product 
of  national  industry. 

That  is  the  principal  argument  of  the  School  against  the  pro 
tective  system.  It  grants  that  by  means  of  protective  measures, 
manufactures  may  be  established,  and  enabled  to  produce  articles 
at  a  lower  rate  even  than  those  imported  from  abroad ;  but  it 
maintains  that  the  immediate  effect  of  such  measures  is  to 
diminish  the  income  of  society  or  the  exchangeable  value  of  the 
yearly  product  of  national  industry.  This  would  diminish  the 
power  of  society  to  accumulate  capital ;  for  capital  can  be  ac 
quired:  only  by  means  of  savings,  realized  by  a  nation  on  its 
annual  revenue.  Now,  the  development  of  national  industry 
depends  on  m  the  amount  of  that  capital,  and  it  is  solely  in  the 
proportion  of  the  latter  that  it  can  be  enlarged.  Society  dimi 
nishes  its  industrial  power,  when,  by  such  measures,  it  estab 
lishes  an  industry  which  would  have  arisen  spontaneously,  if 
things  had  been  left  to  their  own  course. 

We  remark  upon  this  doctrine,  in  the  first  place,  that  Adam 
Smith  employs  the  term  capital  in  the  same  sense  in  which  men 
of  wealth,  merchants,  employ  it  in  their  book-keeping,  and  in 
making  up  their  balance-sheets ;  that  is,  as  the  whole  or  princi 
pal  of  their  estates,  in  contradistinction  to  their  profits,  in 
terests,  or  income. 

*  Smith:  Wealth  of  Nations,  B.  IV.,  Ch.  IL~ 


MANUFACTURING    INDUSTRY.  309 

He  forgets  that  his  own  definition  of  capital  comprehends 
under  this  term  the  moral  and  physical  faculties  of  producers. 

He  maintains,  erroneously,  that  the  income  of  a  nation  de 
pends  solely  on  the  amount  of  its  material  capital.  His  work 
proves  in  a  thousand  places  that  this  income  depends  chiefly  on 
the  mass  of  intellectual  and  corporeal  power  of  the  nation,  as 
well  as  upon  its  social  and  political  progress ;  especially  upon 
those  resulting  from  a  more  perfect  division  of  labor,  and  from 
the  association  of  the  productive  power  of  a  country;  and  it 
proves  that  if  protective  measures  involve  for  a  time  a  sacrifice 
of  material  wealth,  there  is  an  indemnity  of  an  hundred-fold  in 
the  productive  power,  in  the  means  of  acquiring  exchangeable 
values,  and  consequently  that  such  a  sacrifice  is  only  a  repro 
ductive  expense  to  the  nation. 

He  forgets  that  the  principal  means  of  increasing  the  sum  of 
the  material  capital  of  a  nation  consists  in  the  faculty  of  trans 
forming  the  unemployed  power  of  the  nation  into  a  material 
capital,  into  instruments  of  value,  and  productive  of  income ; 
and  that  in  a  purely  agricultural  nation,  a  considerable  amount 
of  natural  power,  which  cannot  be  brought  into  use  or  activity 
but  by  manufactures,  remains  idle  or  dead.  He  does  not  consider 
the  influence  of  manufactures  on  the  home  or  foreign  trade,  upon 
civilization,  upon  the  power  of  the  nation,  upon  the  preservation 
of  its  independence,  nor  upon  the  facilities  which  it  affords  for 
the  acquisition  of  material  wealth. 

He  takes  no  account,  for  instance,  of  the  amount  of  capital 
which  the  English  have  acquired  by  their  colonizations.  Martin 
estimates  the  total  sum  at  more  than  two-and-a-half  milliards  of 
pounds  sterling. 

He  who  exhibits  so  lucidly  that  the  capital  employed  in  in 
termediate  trade  should  not  be  considered  as  the  property  of 
any  nation  in  particular,  until  it  shall  have  been,  so  to  speak,  in 
corporated  with  the  country,  seems  not  to  be  aware  that  the  incor 
poration  of  such  capital  cannot  be  more  fully  realized  than  by 
the  protection  of  domestic  manufactures. 

He  does  not  reflect  that  the  attraction  of  protection  draws 
into  the  country  a  large  foreign  capital,  both  industrial  and  ma- 


810  THEOEY. 

terial.  He  maintains,  erroneously,  that  manufactures  will  come 
of  themselves  in  the  natural  course  of  things ;  we  see,  however, 
that  in  every  nation  political  power  intervenes  to  give  to  that 
natural  course  an  artificial  direction  in  its  particular  interests. 

This  argument,  which  rests  upon  an  equivocation,  and  which, 
by  consequence,  is  essentially  vicious,  he  illustrates  by  an  ex 
ample  altogether  inapplicable,  when,  by  the  folly  of  attempting 
the  artificial  production  of  wine  in  Scotland,  he  tries  to  prove 
that  it  would  be  equally  foolish  by  artificial  means  to  establish 
manufactures. 

He  compares  the  work  of  creating  capital  in  a  nation  to  the 
operations  of  a  man  of  property,  whose  income  is  regulated  ac 
cording  to  the  value  of  his  material  capital,  and  who  can  only 
increase  it  by  adding  his  savings  to  his  capital. 

He  does  not  reflect,  that  this  theory  of  saving,  suitable  for 
the  desk  of  a  tradesman,  would  conduct  a  nation  to  poverty, 
barbarism,  impotence,  and  ruin.  When  economy  is  carried  to 
extremes,  and  all  deny  themselves  much  they  might  enjoy,  every 
stimulus  to  production  is  taken  away.  When  accumulation  is 
the  passion  of  all,  and  men  only  think  of  increasing  their  store 
of  wealth  or  commodities,  the  intellectual  power,  which  produc 
tion  demands,  rapidly  decays.  A  nation  of  such  unhappy 
misers  would  give  up  the  defence  of  their  country,  to  avoid  the 
expenses  of  war ;  and  when  all  its  wealth  had  become  the  prey 
of  an  invader,  it  would  learn  that  the  wealth  of  nations  is 
acquired  in  a  different  way  from  that  of  capitalists. 

The  capitalist  ought,  as  the  father  of  a  family,  to  adopt  quite 
another  theory  from  that  of  the  merchant,  which  has  been  just 
indicated.  At  any  rate,  he  must  expend  for  the  education  of 
his  children  a  portion  of  the  wealth  necessary  to  train  them  for 
some  position  in  life,  and  for  the  management  of  the  estate 
which  he  is  to  leave  them. 

The  formation  of  material  capital  for  a  nation  is  not  ac 
complished  merely  by  saving,  as  in  the  case  of  the  capitalist ; 
like  that  of  productive  power  in  general,  it  results  from  the 
reciprocal  action  of  the  intellectual  and  material  capital  of  the 


MANUFACTURING    INDUSTRY.  311 

country,  the  mutual  influence  of  agricultural,  manufacturing, 
and  commercial  capital,  the  one  upon  the  other. 

The  increase  of  the  material  capital  of  a  nation  depends  on 
the  increase  of  its  intellectual  capital,  and  reciprocally. 

The  creation  of  the  material  capital  of  agriculture  depends 
on  the  creation  of  the  material  capital  of  manufactures,  and 
reciprocally. 

The  material  capital  of  commerce  appears  to  be  always  inter 
mediate  and  auxiliary  to  the  other  two. 

In  the  primitive  state  among  hunters  and  shepherds,  men  are 
indebted  to  nature  for  almost  everything;  capital  is  of  Kttle 
account.  External  commerce  increases  the  latter,  but  this  leads 
to  the  use  of  fire-arms,  powder  and  lead,  which  destroy  entirely 
the  productiveness  of  the  former.  The  hunter  can  never  adopt 
the  theory  of  saving,  he  must  starve  or  become  a  shepherd. 

In  the  pastoral  state,  material  capital  increases  rapidly,  but 
only  ^o  far  as  nature  spontaneously  offers  food  for  cattle.  But 
the  increase  of  population  follows  closely  upon  that  of  cattle 
and  alimentary  resources. 

On  the  one  hand,  cattle  and  pastures  are  distributed  gradually 
into  smaller  portions,  and  on  the  other,  the  foreign  trade  stimu 
lates  consumption.  In  vain  should  we  preach  the  theory  of 
saving  to  shepherds :  they  must  starve,  or  enter  the  condition  of 
cultivators. 

To  an  agricultural  people,  the  employment  of  the  hitherto 
unused  powers  of  nature,  opens  a  field  of  activity,  vast,  but  not 
without  limits. 

The  cultivator  can  obtain  food  for  his  personal  wants ;  in  ad 
dition  to  that,  he  can  improve  his  land  and  increase  his  cattle ; 
but  the  increase  of  food  is  always  followed  by  an  increase  of 
population.  Material  capital,  especially  land  and  cattle,  in 
proportion  as  the  former  becomes  more  fertile,  and  the  latter 
more  abundant,  are  apportioned  among  a  greater  number  of 
individuals.  But  as  the  surface  of  the  earth  cannot  be  extended 
by  labor,  as  there  will  be  a  want  of  modes  of  communication,  which, 
as  we  have  shown  in  a  former  chapter,  must  be  very  imperfect 
where  trade  is  limited,  as  each  kind  of  land  can  only  be  employed 


312  THEORY. 

in  that  culture  to  which  it  is  adapted,  and  as  a  merely  agricul 
tural  nation  is,  for  the  most  part,  without  such  advantages, 
without  the  knowledge,  the  stimulants,  the  energy,  and  the 
social  culture  which  manufactures  and  commerce  bring  in  their 
train ;  a  merely  agricultural  nation  soon  arrives  at  that  stage 
when  the  increase  of  material  agricultural  capital  cannot  proceed 
at  equal  pace  with  the  increase  of  population,  and  when,  of 
course,  individual  poverty  increases  daily,  though  the  collective 
capital  of  the  nation  may  not  cease  to  augment  at  the  same  time. 

In  such  a  state  of  things  the  most  important  product  of  a 
nation,  men,  not  finding  labor  or  livelihood  at  home,  resort  to 
emigration.  It  will  be  very  small  consolation  for  such  people 
to  know  that  the  School  regards  men  as  accumulated  capital ; 
for  the  exportation  of  men  not  only  brings  no  return,  but  it  is 
accompanied  by  the  export  of  a  considerable  amount  of  material 
value  in  the  form  of  furniture,  tools,  and  money. 

It  is  obvious,  in  such  circumstances,  that  so  long  as  the 
national  division  of  labor  remains  imperfectly  developed,  neither 
labor  nor  economy  can  increase  the  material  capital,  or  add  to 
the  material  wealth  of  individuals. 

It  is  true  that  an  agricultural  country  is  hardly  ever  without 
some  external  commerce ;  and  external  commerce  is,  to  a  certain 
degree,  the  substitute  for  domestic  manufactures,  as  to  the 
increase  of  capital,  in  so  far  as  it  brings  manufacturers  abroad 
into  relations  with  the  cultivators  at  home.  But  those  relations 
are  partial  and  very  insufficient ;  first,  because  they  refer  only 
to  certain  special  products,  and  scarcely  ever  extend  further 
than  to  the  sea-coast,  or  to  the  banks  of  navigable  rivers; 
secondly,  because  they  are  at  any  rate  very  irregular,  and  are 
y  frequently  interrupted  by  war,  the  fluctuations  of  commerce,  by 
commercial  regulations,  by  abundant  crops,  or  by  importations 
from  other  countries. 

The  material  capital  of  the  agriculturist  increases  upon  a 
great  scale,  regularly  and  indefinitely,  from  the  day  when 
manufacturing  industry,  fully  equipped,  commences  active  opera 
tions  among  the  cultivators. 

The  largest  part  of  the  material  capital  of  a  nation  is  fixed  in 


MANUFACTURING    INDUSTRY.  313 

the  soil.  In  every  country,  the  value  of  the  land,  of  the  build 
ings  in  country  and  town,  of  the  workshops,  of  factories,  water 
works,  mines,  etc.,  make  up  an  amount  from  two-thirds  to  nine- 
tenths  of  all  the  values  which  the  nation  possesses ;  it  ought 
then  to  be  plainly  seen  that  whatever  increases  or  diminishes 
the  value  of  land,  increases  or  diminishes  the  amount  of  the 
material  capital  of  the  nation.  Now  we  see  that  the  value  of 
land  of  the  same  natural  fertility  is  much  greater  in  the  neigh 
borhood  of  a  small  town  than  in  a  remote  district,  near  a  large 
city  than  near  a  small  town,  in  a  manufacturing  country  than 
in  a  merely  agricultural  country.  We  see,  on  the  other  hand, 
that  the  value  of  houses  or  factories,  as  well  as  of  building  lots, 
in  cities,  generally  falls  or  rises  in  proportion  as  the  intercourse 
of  the  city  with  the  country  is  extended  or  restricted,  or  in 
proportion  as  the  farmers  become  richer  or  poorer.  Hence  it 
follows  that  the  increase  of  agricultural  capital  depends  on  the 
increase  of  manufacturing  capital,  and  reciprocally. 

But  in  the  transition  from  a  purely  agricultural  state  to  the 
condition  of  a  manufacturing  state,  this  reciprocal  influence  acts 
with  much  greater  power  on  the  side  of  manufacturing  industry 
than  on  that  of  agriculture ;  for  just  as,  in  the  transition  from 
the  life  of  the  hunter  to  that  of  the  shepherd,  the  increase  of 
capital  comes  chiefly  from  the  rapid  increase  of  flocks,  and  in 
the  transition  from  the  pastoral  life  to  that  of  agriculture,  chiefly 
from  the  rapid  acquisition  of  new  fertile  lands  and  a  surplus  of 
food,  so  when  a  nation  passes  from  a  merely  agricultural  to  a 
manufacturing  industry,  the  increase  of  the  national  material 
capital  is  chiefly  due  to  the  capital  and  power  employed  in 
manufactures,  because  a  considerable  sum  of  natural  and  intel 
lectual  power,  hitherto  useless,  is  thus  transformed  into  a 
material  and  intellectual  capital.  Far  from  being  an  obstacle 
in  the  way  of  material  saving,  the  creation  of  manufactures  sup 
plies  a  nation  with  the  means  of  investing  advantageously 
its  agricultural  savings,  that  is  an  effective  stimulus  to  such 
economies. 

In  the  legislative  assemblies  of  North  America,  it  has  been 
often  said  that  for  want  of  a  market  grain  has  rotted  upon  its 


314  THEORY. 

stalk,  not  worth  the  expenses  of  harvesting.  In  Hungary  the 
farmer  is  smothered  in  abundance,  whilst  manufactured  goods  cost 
there  three  or  four  times  more  than  in  England.  Even  Germany 
can  remember  such  a  state  of  things.  In  purely  agricultural  coun 
tries,  every  surplus  of  rural  products  does  not  constitute  mate 
rial  capital.  It  is  only  with  the  aid  of  manufactures  that  it  be 
comes,  by  its  accumulation  in  warehouses,  a  commercial  capital, 
and  that  by  its  sale  to  a  manufacturing  population  it  becomes  manu 
facturing  capital.  What  would,  in  the  hands  of  the  farmers, 
be  a  useless  stock,  becomes  a  productive  capital  in  the  hands 
of  the  manufacturers,  and  reciprocally. 

Production  renders  consumption  possible,  and  the  desire  of 
consuming  excites  to  production.  A  purely  agricultural  country 
depends  for  its  consumption  on  the  condition  of  foreign  coun 
tries,  and  when  that  is  not  favorable  to  it,  the  production  excited 
by  the  desire  of  consuming  ceases.  But  in  a  nation  uniting 
upon  its  territory  both  manufacturing  and  agricultural  industry, 
their  reciprocal  exciting  influence  does  not  cease,  and  the 
increase  of  production  proceeds  on  both  sides,  and  so  also  of 
capital. 

Nations  at  once  agricultural  and  manufacturing  being  always, 
for  reasons  already  mentioned,  much  richer  in  material  capital 
than  purely  agricultural  nations,  it  is  a  striking  fact  that  the 
rate  of  interest  among  such  people  is  always  quite  low ;  men  of 
enterprise  find  capital  more  easily  attainable  and  upon  better 
terms.  Hence  the  advantage  in  a  competition  with  the  new 
manufactures  of  an  agricultural  people  just  entering  that  career ; 
hence  a  constant  inundation  of  manufactured  goods  poured  into 
the  latter  ;  hence  the  permanent  debt  to  manufacturing  nations, 
and  hence  those  constant  fluctuations  in  the  market  value  of 
commodities,  of  manufactured  articles,  and  of  money  exchange, 
which  arrest  the  accumulation  of  material  capital,  at  the  same 
time  that  they  impair  the  public  morality  and  internal  economy 
of  a  country. 

The  School  distinguishes  between  capital  fixed  and  capital 
circulating,  and  includes,  in  a  very  strange  way,  under  the  first 
kind,  a  multitude  of  things,  which  circulate  without  making 


MANUFACTURING    INDUSTRY.  315 

any  practical  application  of  that  distinction.  It  passes  in  silence 
over  the  only  instance  in  which  that  distinction  could  ^>e  useful. 
Thus  material,  like  intellectual  capital,  is  generally  attached  to 
agriculture  or  manufacturing  industry,  or  to  commerce,  or  to 
a  particular  branch  of  one  of  these  three  departments  01  labor ; 
and  it  is  even  frequently  attached  to  certain  localities.  Fruit- 
trees  which  have  been  cut  down  have  quite  a  different  value  with 
the  cabinet-maker,  who  converts  them  by  his  art  into  furniture, 
from  that  in  which  they  are  held  by  the  agriculturist,  who  uses 
them  for  the  production  of  fruits.  Flocks  of  sheep  killed  in 
mass,  as  is  sometimes  done  in  Germany  and  in  North  America, 
possess  no  longer  the  value  they  had  as  instruments  for  the  pro 
duction  of  wool.  Vineyards  have,  as  such,  a  value  which  they 
lose  if  they  are  turned  into  plough-lands.  Ships  employed  as 
timber  or  fuel  have  much  less  value  than  when  they  serve  as 
transports.  Of  what  service  to  manufactures  would  water-power 
be,  if  manufacturing  industry  could  not  be  pursued  with  profit  ? 
Individuals  lose  generally,  by  changing  their  residence,  the 
chief  part  of  their  productive  power,  so  far  as  it  consists  of 
experience,  habits,  and  acquired  skill.  To  all  these  things,  to 
all  these  qualities,  the  School  gives  the  general  name  of  capital, 
and  in  virtue  of  that  terminology,  it  transfers  them  at  pleasure 
from  one  branch  of  industry  to  another.  Thus  Say  advises  the 
English  to  devote  to  agriculture  their  manufacturing  capital.  He 
does  not  explain  how  this  miracle  could  be  wrought,  and  to  this  day 
it  is  unknown  to  the  statesmen  of  England.  Say,  it  is  plain,  has 
blended  individual  with  national  capital.  A  manufacturer  or  a 
merchant  may  withdraw  his  capital  from  manufacturing  industry 
or  commerce  by  selling  his  manufactories  or  his  ships  to  another, 
and  by  purchasing  with  the  proceeds  real  estate ;  but  a  whole 
nation  cannot  perform  such  an  operation  without  sacrificing  a 
large  portion  of  its  material  and  intellectual  capital.  The  rea 
son  why  the  School  has  darkened  a  subject,  in  itself  so  clear,  is 
obvious.  When  things  are  called  by  their  true  names,  it  must 
be  plain  to  the  most  careless  observer,  that  the  displacement  of 
productive  power  from  one  branch  of  industry  to  another, 


316  THEORY. 

involves  difficulties  which,  so  far  from  always  sustaining  free 
trade,  often  furnishes  the  strongest  arguments  in  favor  of  pro 
tection.* 


CHAPTER  X. 

t 

MANUFACTURING  INDUSTRY  AND  AGRICULTURAL  IN- 
TERESTS. 


IF  protection  to  domestic  manufactures  be  prejudicial  to  con 
sumers  of  manufactured  goods,  and  if  it  only  serves  to  enrich 
manufacturers,  the  owners  of  estates  and  farmers,  who  consti 
tute  the  most  numerous  and  the  most  important  class  of  con 
sumers,  would  particularly  suffer.  But  it  can  be  shown  that 
this  class  derives  from  manufactures  greater  advantages  than 
manufacturers  themselves ;  for  manufacturing  industry  creates 
a  demand  for  a  greater  variety  and  a  larger  quantity  of  rural 
products;  it  increases  the  exchangeable  value  of  agricultural 

*  There  are  not  merely  difficulties  in  the  way  of  a  national  change  from 
one  department  of  industry  to  another,  according  to  the  phrase  so  flippantly 
employed  by  the  School,  of  thus  transferring  capital ;  there  are  utter  im 
possibilities  in  the  way.  One  manufacturer  may  sell  his  factory  and  ma 
chinery  for  the  purpose  of  betaking  himself  to  agriculture ;  a  hundred  or 
a  thousand  may  do  it,  but  this  makes  no  change  of  industry.  Individuals 
have  changed  occupations,  but  the  national  industry  has  undergone  no 
change :  one  manufacturer  has  given  place  to  another,  and  one  agriculturist 
to  another.  Manufacturing  capital  is  chiefly  invested  in  immense  factory 
buildings,  surrounded  by  dwellings  for  workmen,  and  in  machinery  and 
implements  fit  for  nothing  else ;  this  capital  cannot,  by  any  possibility,  be 
applied  to  agriculture.  When  a  whole  nation  can  no  longer  manufacture, 
the  workmen  may  by  possibility  obtain  other  employments,  though  expe 
rience  proves  that  they  perish  by  multitudes  in  the  attempt ;  but  the  capital 
invested  in  buildings,  machinery,  and  implements,  is  wholly  lost.  And 
even  when  men  skilled  in  working  in  iron  and  cotton,  wool  and  silk,  are 
compelled  to  find  labor  in  other  branches  of  industry,  an  immense  pro 
ductive  power  is  lost,  because  all  their  skill,  experience  and  facility,  becomes 
useless.  —  [S.  C.] 


MANUFACTURING  INDUSTRY.         317 

products,  and  enables  farmers  to  realize  better  prices  and  a 
larger  income  from  their  land  and  their  labor.  Thence  an  ad 
vance  in  rents,  in  the  profits  of  farming,  and  of  agricultural 
wages ;  and  this  increase  of  rent  and  capital  must  be  followed 
by  an  increase  in  the  exchangeable  value  of  land  and  labor. 

The  exchangeable  value  of  country  property  is,  in  fact,  only 
rent,  converted  into  capital ;  it  depends  on  the  one  hand  upon 
the  amount  and  upon  the  value  of  the  rent,  and  on  the  other 
upon  the  mass  of  moral  and  material  capital  which  exists  in  the 
country. 

All  individual  and  social  progress,  all  general  development 
of  the  productive  power  of  the  country,  but  especially  the 
establishment  of  manufactures,  augments  the  rent  in  quantity, 
though  it  may  have  a  tendency  to  distribute  it  among  a  larger 
number.  In  an  agricultural  country,  little  cultivated,  and 
sparsely  peopled,  in  Poland,  for  instance,  rent  rises  to  the  third 
or  to  the  half  of  the  raw  product ;  in  a  more  advanced  country, 
populous  and  rich  as  England,  for  instance,  it  does  not  exceed 
the  fourth  or  fifth  part.  The  whole  amount,  however,  of  this 
smaller  proportion,  is  greater  than  that  of  the  larger  proportion, 
especially  in  money,  and  still  more  in  manufactured  articles ; 
for  the  fifth  of  the  25  bushels  which  in  England  is  the  average 
yield  of  wheat,  is  5  bushels ;  and  the  third  of  9  bushels,  the 
average  yield  of  Poland  is  but  3;  besides,  the  5  bushels  in 
England  are  worth  in  money  from  25  to  30  shillings,  and  the 
3  bushels  in  Poland  are  not  worth  more  than  8  or  9  shil 
lings  ;  manufactured  goods  in  England  cost  less  than  half  what 
they  cost  in  Poland ;  of  course  the  English  proprietor  can,  with 
his  rent  of  30  shillings,  buy  10  yards  of  cloth,  whilst  the  Polish 
proprietor,  with  9  shillings  rent,  can  purchase  but  2.  The 
former,  with  the  fifth  of  the  raw  products,  is  therefore  three 
times  better  off  than  the  proprietor  receiving  a  rent  of  one-third ; 
and  five  times  better  off,  as  a  consumer  of  manufactured  goods, 
than  the  latter  with  the  third.  As  to  farmers  and  their  laborers, 
their  condition  is  likewise  vastly  better  in  England  than  in  Po 
land,  even  as  consumers  of  manufactured  articles.  In  fact,  on 
a  product  of  25  bushels  in  England,  there  are  20  left  for  seed, 


318  THEORY. 

for  improvement,  wages,  and  profits.  Now,  if  we  take  for  these 
two  latter  elements  the  half,  that  is,  10  bushels,  the  average  of 
that  half  will  be  60  shillings ;  and,  at  a  rate  of  10  shillings 
a  yard,  it  will  represent  20  yards  of  cloth ;  in  Poland,  on  the 
contrary,  a  raw  product  of  9  bushels  will  leave  but  6  bushels 
for  seed,  improvements,  profits,  and  wages  ;  and  if  we  take  again 
for  profits  and  wages  one-half,  that  is,  3  bushels,  that  part 
is  worth  but  from  8  to  9  shillings,  which  can  purchase  only 
2J  yards  of  cloth. 

Rent  is  one  of  the  principal  modes  of  investing  material 
capital.  Its  value  is  consequently  regulated  by  the  amount  of 
capital  in  the  country,  and  by  the  relation  between  demand  and 
supply.  The  abundance  of  capital  which  commerce,  foreign  and 
domestic,  amasses  in  a  manufacturing  nation,  the  low  rate  of 
interest  which  prevails,  the  fact  that  among  a  manufacturing 
and  trading  people  a  great  number  of  wealthy  individuals 
are  constantly  endeavoring  to  invest  their  money  in  land, 
enhances  the  price  of  real  estate,  and  places  it  far  above  the 
value  of  land  in  any  purely  agricultural  country.  In  Poland, 
land  sells  for  ten  to  twenty  times  its  yearly  rent ;  in  England, 
it  sells  for  thirty  to  forty  times  its  annual  rent. 

As  the  money  value  of  a  rent  is  higher  in  a  manufacturing 
and  trading  than  in  an  agricultural  nation,  the  value  in  money 
of  lands  is  likewise  much  greater.  Land  of  equal  natural 
fertility  is  worth  ten  to  twenty  times  more  in  England  than  in 
Poland. 

This  influence  of  manufactures  on  rent,  and  therefore  upon 
the  exchangeable  value  of  land,  is  noticed  by  Adam  Smith  at  the 
end  of  the  second  chapter  of  his  first  book,  but  only  in  passing 
and  without  placing  in  proper  relief  the  immense  importance  of 
manufactures  in  this  respect.  He  distinguishes  there  between 
the  causes  which  act  directly  in  augmenting  the  value  of  rents, 
such  as  agricultural  improvements,  and  the  increase  of  cattle  in 
number  and  exchangeable  value,  and  the  causes  which  act  indi 
rectly,  and  he  places  manufactures  among  the  latter.  Thus 
manufactures,  which  are  the  principal  cause  of  the  rise  of  rent, 
as  well  as  of  the  value  of  land,  are  thrown  by  him  into  the  back- 


MANUFACTURING    INDUSTRY.  319 

ground  as  scarce  worthy  of  notice,  whilst  improvements  of  the 
soil  and  the  increase  of  cattle,  which  are  really  the  effect  of 
manufactures,  and  of  the  trade  which  they  produce,  are  placed 
before  them;  or,  at  least,  put  forward  as  principal  causes. 
Neither  Adam  Smith  nor  his  disciples  have  even  approached  a 
proper  estimate  of  the  importance  of  manufactures  in  this 
respect. 

We  remarked,  that  under  the  influence  of  manufactures  and 
the  trade  which  belongs  to  them,  the  natural  fertility  being 
equal,  the  value  of  land  was  in  England  ten  or  twenty  times 
greater  than  in  Poland.  If  we  compare  the  total  amount  of  the 
manufacturing  product  and  capital  of  England  with  that  of  its 
agricultural  products  and  capital,  we  find  that  the  chief  part  of 
the  wealth  of  the  country  consists  in  the  value  of  the  real  estate. 

M'  Queen  furnishes  the  following  table  of  wealth  and  annual 
income  of  England.* 

I.   NATIONAL  CAPITAL. 
Capital  fixed  in  agriculture,  land,  mines,  and 

fisheries £2,604,000,000 

Circulating  capital  in   cattle,   implements, 

provisions  and  money 655,000,000 

Tools  of  agriculturists 52,000,000 

""  £3,311,000,000 

Capital  invested  in  manufactures  and  com 
merce,  manufactures  and  internal  trade  in 
manufactured  goods 178,500,000 

Commerce  in  colonial  goods 11,000,000 

Commerce  in  manufactured  goods  with  fo 
reign  countries 16,500,000 

To  which  may  be  added  for  increase  since 
1835,  when  this  estimate  was  made 12,000,000 

218,000,000 
Town  buildings  of  every  kind,  and  buildings 

for  manufactures 605,000,000 

Ships 33,500,000 

Bridges,  canals,  railroads 118,000,000 

Horses,  others  than  those  for  agriculture  . .         20,000,000 

776,500,000 

*  It  ought  to  be  understood  that  the  estimates  of  this  Table  are  not,  and 
cannot  be  other  than  very  remote  approximations.  —  [H.  R.] 


320  THEORY. 

Total  of  the  national  capital,  deducting  what  is  invested  in 
the  colonies,  foreign  loans,  and  the  public  debt  of  Eng 
land  £4,305,500,000 

II.  GROSS  NATIONAL  INCOME. 

Agriculture,  mines,  and  fisheries 539,000,000 

Manufacturing  industry 259,500,000 

Total "798,500,000 

From  this  table  it  results  —  1st,  That  the  value  of  the  soil 
devoted  to  agriculture  comprehends  the  26-43d  of  the  total 
wealth  of  England,  and  is  nearly  12  times  greater  than  that  of 
the  whole  capital  invested  in  manufactures  and  commerce. 

2d,  That  the  sum  employed  in  agriculture  comprehends  more 
than  three-fourths  of  the  capital  of  England. 

3d,  That  the  whole  value  of  fixed  property  in  England,  viz., 
land,  etc.,  is  £2,604,000,000 

Towns,  buildings,  and  manufactories 605,000,000 

Canals  and  railroads  118,000,000 

Total 3,327,000,000 

composing  more  than  three-quarters  of  that  capital. 

4th,  That  the  manufacturing  and  commercial  capital,  including 
ships,  does  not  exceed  241,500,000,  and  constitutes,  therefore, 
but  about  one-eighteenth  of  the  national  wealth. 

5th,  That  the  agricultural  capital  of  England,  which  is  3,311 
millions,  produces  a  gross  income  of  539  millions,  that  is,  about 
thirteen  per  cent.,  whilst  the  manufacturing  and  trading  capital, 
which  is  but  of  218  millions,  yields  a  yearly  gross  product  of 
259,500,000,  or  one  hundred  and  twenty  per  cent.  It  must 
not  be  overlooked  here,  above  all,  that  218  millions  of  manu 
facturing  capital,  yielding  a  yearly  income  of  259,500,000  is  the 
main  cause  which  swells  the  agricultural  capital  to  the  enormous 
sum  of  3,311  millions,  with  its  yearly  product  of  539  millions. 
By  far  the  greatest  portion  of  agricultural  capital  consists  in 
the  value  of  the  land  and  cattle.  By  doubling  and  tripling  the 
population  of  the  country,  by  sustaining  an  immense  external 
commerce,  by  furnishing  a  vast  quantity  of  shipping,  by  ac 
quiring  and  employing  a  multitude  of  colonies,  manufactures 


MANUFACTtmiNG    INDUSTRY.  321 

have  increased  in  the  same  proportion  the  demand  for  food  and 
raw  material ;  they  have  created  in  cultivators  the  desire,  and 
furnished  the  means,  of  indulging  to  that  increased  extent ;  they 
have  raised  the  exchangeable  value  of  agricultural  products,  and 
thus  determined  a  proportional  increase  in  quantity  and  ex 
changeable  value  of  the  rent  of  land  and  of  the  value  of  the 
soil.  Destroy  that  manufacturing  and  commercial  capital  of 
218,000,000,  and  not  only  the  income  of  259,500,000  would 
disappear,  but  also  far  the  greatest  part  of  the  3,311,000,000 
of  agricultural  capital,  and,  consequently,  of  the  income  of 
539,000,000  derived  from  that  capital.  The  income  of  England 
will  be  diminished  not  merely  259,500,000,  the  value  of  the 
manufacturing  production,  but  the  exchangeable  value  of  the  soil 
will  fall  to  the  rate  it  bears  in  Poland,  that  is,  to  the  tenth  or 
to  the  twentieth  of  its  present  value. 

Hence  it  follows  that  the  capital  usefully  employed  in  manu 
factures  by  an  agricultural  nation  increases  in  time  the  value  of 
the  soil  ten-fold.  Experience  and  statistics  unite  everywhere  in 
confirming  this  conclusion.  We  have  always  seen  the  value  of  land 
as  well  as  of  cattle  rapidly  enhanced  by  manufacturing  industry. 
The  justness  of  our  remark  will  be  readily  seen  if  we  contrast 
these  values  in  France,  1789  with  1840,  in  the  United  States, 
1820  with  1830,  in  Germany,  1830  with  1840,  that  is  in  a  feeble 
development  with  a  grand  progress  in  manufactures. 

The  cause  of  this  fact  is  the  increase  of  the  productive  power 
of  the  country,  an  increase  which  is  itself  the  effect  of  a  national 
division  of  labor  and  of  a  more  energetic  association  of  national 
power,  of  a  better  employment  of  the  moral  and  natural  power 
at  the  disposal  of  the  country,  and  finally,  of  foreign  commerce. 

It  is  with  manufactures  as  with  improved  ways  of  communi 
cation  ;  not  only  do  these  ways  furnish  a  perpetual  rent  or 
income,  and  thus  justify  sinking  the  capital  employed  in  their 
construction,  but  they  contribute  powerfully  to  the  progress  of 
manufacturing  t  industry  and  of  agriculture,  to  a  degree  even 
of  ten-fold,  in  time,  the  value  of  estates  in  land  situated  in 
their  vicinity.  As  compared  with  the  builders  and  owners  of 
such  modes  of  transportation  and  travelling,  the  agriculturist 
21 


322  THEORY. 

has  this  signal  advantage,  that  the  ten-fold  increase  of  his  capital 
is  sure  at  any  rate,  and  that  he  realizes  this  profit  without  any 
sacrifice,  whilst  they  risk  the  whole  capital  employed.  The 
position  of  the  agriculturist,  as  contrasted  with  that  of  manufac 
turers  in  their  first  efforts,  is  equally  favorahle. 

But  if  the  influence  of  manufactures  upon  agricultural  produc 
tion,  upon  rent,  and  upon  the  value  of  estates  in  land  is  so  re 
markable  ;  if  it  is  so  advantageous  for  all  concerned  in  agricul 
ture,  how  can  it  be  maintained  that  protective  duties  favor 
manufactures  at  the  expense  of  farmers  or  proprietors  of  land. 

The  material  welfare  of  agriculturists,  as  well  as  of  men  in  other 
branches  of  industry,  depends  chiefly  upon  the  surplus  of  the 
value  of  their  production  over  that  of  their  consumption.  Low 
prices  of  manufactured  products  are  of  far  less  consequence  to 
them  than  an  active  demand  for  every  kind  of  farm  products,  and 
a  high  exchangeable  value  for  those  products.  If  protective 
duties  result  in  the  extension  of  the  agricultural  market,  they 
cannot  lose  by  the  rise  in  price  of  manufactured  goods,  and 
they  incur  no  sacrifice  for  the  benefit  of  the  manufacturer.  Now 
this  result  never  fails  of  being  exhibited  in  every  country 
having  a  vocation  for  manufactures,  and  this  exhibition  is  often 
very  complete  in  the  first  stages  of  the  manufacturing  career  of 
nations ;  because,  in  that  period,  the  chief  part  of  the  capital 
employed  in  new  industries  is  devoted  to  houses,  factories,  water 
works,  etc.,  an  investment  of  general  advantage  to  the  agricul 
turist.  But  if  at  the  beginning  the  benefits  which  result  from 
an  enlargement  of  their  market,  and  from  the  increase  in  value 
of  their  products,  largely  compensate  the  inconvenience  of  the 
enhanced  price  of  manufactured  products,  this  favorable  ten 
dency  is  strengthened  in  the  progress  of  time ;  for,  whilst  the 
increase  of  manufactures  enhances  the  demand  for  the  products 
of  the  soil,  it  diminishes  the  price  of  manufactured  goods. 

The  well-being  of  the  farmer,  and  particularly  of  the  land 
owner,  exacts  that  the  value  of  his  instruments,  that  is,  of  his 
property,  shall  at  the  least  be  sustained.  It  is  a  principal  con 
dition,  not  only  of  his  welfare,  but  often  of  his  whole  material 
existence.  It  is  not  seldom  indeed,  that  whilst  the  cultivator 


MANUFACTURING  INDUSTRY.         323 

produces  yearly  more  than  he  consumes,  he  is  nevertheless 
ruined.  This  happens  when  credit  is  shaken,  at  the  moment 
when  his  property  is  encumbered  with  mortgages  ;  when,  on  the 
one  hand,  the  demand  for  money  exceeds  the  supply,  and  when, 
on  the  other,  the  supply  of  land  exceeds  the  demand.  At  such 
times,  the  withdrawal  of  money  lent,  and  the  large  quantities 
of  land  offered  for  sale,  involve  a  depreciation  of  farm  property, 
and  a  great  number  of  the  most  enterprising,  the  most  skilful, 
and  the  best  managers  among  the  cultivators  are  ruined,  not 
because  their  consumption  surpasses  their  production,  but  be 
cause  their  property,  the  investment  of  their  labor,  has  lost  in 
their  hands,  from  causes  not  under  their  control,  a  great  part 
of  its  value ;  because  their  credit  has  been  injured,  and  because 
the  amount  of  the  mortgages  which  encumber  their  property  is 
no  longer  in  the  same  ratio  with  the  value  of  that  property  in 
money.  Such  revulsions  burst  forth  more  than  once  during  the 
last  century  in  Germany,  and  more  recently  in  the  United 
States,  and  in  this  way  a  large  number  of 'the  German  nobility 
have  lost  their  estates  without  understanding  that  they  were  in 
debted  for  their  ruin  to  the  policy  of  their  brother  nobles  of 
England,  —  men,  no  doubt,  of  excellent  intentions. 

Very  different  is  the  condition  of  farmers  or  land-owners  in 
countries  where  manufactures  are  in  full  and  successful  opera 
tion.  There,  whilst  the  fertility  of  the  soil  increases  as  well  as 
the  price  of  farm  products,  profit  is  made  not  only  on  the  surplus 
of  their  production  over  that  of  their  consumption,  but  propri 
etors  obtain  with  an  increase  of  the  rent  of  their  land  a  pro 
portionate  increase  of  their  capital.  Their  property  doubles  and 
triples  in  exchangeable  value ;  not  because  they  labor  more,  or 
better  improve  their  fields,  or  because  they  save  more  ;  they  owe 
this  increased  value  to  manufactures.  Then  they  have  the  means 
and  the  desire  to  redouble  their  exertions  for  the  improvement  of 
their  lands,  for  the  increase  of  their  cattle,  for  economy  of  their 
earnings,  though  they  indulge  in  a  larger  consumption.  Their 
property  having  acquired  greater  value,  their  credit  augments, 
and  they  are  better  able  to  procure  the  material  capital  required 
to  make  improvements. 


324  THEORY. 

/ 

Smith  says  nothing  of  the  influence  exerted  by  this  exchange 
able  value  of  lands.  Say  is  of  opinion  that  the  exchangeable 
value  is  of  no  importance,  since,  whether  at  low  or  at  high 
prices,  their  productive  agency  is  always  the  same.  It  is  sad 
to  find  an  author  whom  German  translators  have  held  up  as  a 
qualified  teacher  of  the  nation,  expressing  an  opinion  so  erro 
neous  upon  a  question  which  so  deeply  concerns  the  prosperity 
of  nations.  We  believe  we  are  able  to  prove,  on  the  contrary, 
that  there  is  no  more  certain  index  of  national  prosperity  than 
the  rise  and  the  fall  of  the  exchangeable  value  of  land,  and  that 
fluctuations  and  revulsions  in  its  value  must  be  regarded  among 
the  most  fatal  pests  that  can  befall  a  country. 

The  School  has  been  led  astray  by  its  attachment  to  the 
theory  of  free  trade,  as  it  pleases  the  School  to  understand  it ;  for 
nowhere  do  fluctuations  and  revulsions  in  the  real  estate  markets 
fall  heavier  than  upon  an  agricultural  population,  having  free 
trade  with  a  rich  and  powerful  manufacturing  nation. 

Foreign  commerce,  it  is  true,  tends  to  raise  both  rents  and 
the  value  of  land,  but  with  much  less  energy,  uniformity  and 
persistence  than  manufacturing  industry,  or  the  constant  increase 
of  domestic  industry,  and  the  exchange  of  its  products  for  those 
of  domestic  agriculture. 

So  long  as  a  nation  still  possesses  a  great  extent  of  unculti 
vated  or  badly  cultivated  lands — -so  long  as  it  produces  important 
commodities,  which  manufacturing  nations,  richer  than  itself, 
receive  in  exchange  for  their  manufactured  articles,  the  transport 
of  which  may  be  easy — so  long  as  the  demand  for  those  articles 
continues  and  increases  yearly,  neither  interrupted  by  war  nor 
by  restrictive  measures,  foreign  trade  exerts  a  powerful  influence 
towards  the  elevation  of  rents  and  the  value  of  the  soil.  But 
let  any  of  these  conditions  be  wanting,  or  cease,  and  progress 
will  not  only  come  to  an  end,  but  a  retrograde  movement,  decided 
and  continuous,  will  probably  occur. 

Nothing  exerts  a  worse  influence  in  this  respect  than  the 
fluctuations  of  foreign  demand ;  as  when  a  war,  a  bad  crop,  the 
failure  of  certain  supplies,  or  any  other  circumstances,  beget  in 
a  manufacturing  nation  a  great  deficiency  of  food  and  raw  mate- 


MANUFACTURING    INDUSTRY.  825 

rials  in  general,  or  of  certain  important  articles  in  particular, 
and  when  afterwards,  peace,  a  full  crop,  larger  importations 
from  other  countries,  or  legislative  measures,  mainly  cut  off  this 
demand.  If  the  change  lasts  but  a  short  time,  an  agricultural 
country  may  derive  some  advantage  from  it ;  but  if  protracted 
for  a  series  of  years,  the  whole  circumstances  of  the  country, 
ar.d  all  its  private  economy,  will  be  regulated  in  accordance. 
The  producer  accommodates  himself  to  enlarged  consumption ; 
comforts,  which  in  any  other  circumstances  he  would  have  con 
sidered  as  luxuries,  become  necessaries.  His  income  and  the 
value  of  his  property  both  increased,  he  is  encouraged  to  under 
take  improvements  and  ameliorations,  to  make  acquisitions, 
which  he  would  never  else  have  made.  Purchases  and  sales, 
leases  and  loans,  will  be  made  at  the  rates  of  the  increased  value 
of  the  land  and  its  higher  rent.  The  state  itself  will  not  hesi 
tate  to  increase  its  expenses  in  proportion  as  the  welfare  of  indi 
viduals  is  increased.  But  let  this  demand  cease  suddenly,  and 
the  equilibrium  is  lost  between  production  and  consumption — 
between  depreciated  values  and  the  amount  for  which  they  are 
pledged,  and  of  which  the  money  value  does  not  diminish — 
between  the  money  rents  of  farms  and  the  whole  product  of  the 
land  in  money — between  the  income  and  the  expenses  of  the 
country;  all  which  involves  bankruptcy,  embarrassment,  dis 
couragement  and  recoil  in  material  development,  as  well  as  in 
moral  and  political  culture.  Agricultural  prosperity  has  thus 
enjoyed  a  stimulus  like  opium  or  strong  liquors;  for  a  while,  it 
was  excited,  to  be  enfeebled  forever  thereafter ;  it  is  Franklin's 
lightning,  which  for  a  moment  casts  a  brilliant  light  upon  sur 
rounding  objects,  only  to  replunge  them  in  a  deeper  darkness. 

A  transient  prosperity  in  agriculture  is  far  less  desirable 
than  less  success  if  permanent ;  to  be  advantageous  to  indi 
viduals  as  to  nations,  it  must  be  durable.  It  will  be  durable  if 
its  growth  is  gradual,  and  if  the  country  possesses  guarantees 
for  this  increase  and  this  duration.  A  low  exchangeable  value 
of  land  is  to  be  preferred  to  fluctuating  value ;  a  constant  and 
regular  rise  alone  can  secure  to  a  country  lasting  prosperity ; 
and  the  existence  of  manufacturing  industry  in  a  well  consti- 


326  THEORY. 

tuted  nation  is  the  best  guarantee  of  regular  and  continued 
progress. 

We  are  as  yet  but  little  enlightened  in  regard  to  the  influence 
of  domestic  manufactures,  upon  rents,  and  the  value  of  the  soil, 
in  comparison  with  that  which  is  exercised  by  foreign  commerce. 
"We  see  this  in  the  proprietors  of  vineyards  in  France,  who  regard 
the  protective  system  as  injurious  to  them,  and  in  the  hope  of 
raising  their  rents  claim  the  largest  liberty  of  exchange  with 
England. 

The  report  of  Dr.  Bowring  on  the  commercial  relations 
between  England  and  France,  a  report  intended  to  exhibit  the 
advantage  of  a  larger  importation  of  English  manufactures,  and, 
of  course,  a  larger  export  of  wines  from  France,  contains  facts 
and  statements  the  most  conclusive  against  the  argument  of  its 
author. 

Dr.  Bowring  compares  the  importation  into  the  Netherlands 
of  French  wines  (2,515,193  gallons,)  with  one  import  into 
England  (431,509  gallons,)  to  show  the  extent  to  which  French 
wines  might  find  a  market  in  England  if  trade  were  free. 

Now  suppose,  which  is  very  improbable,  that  the  sale  of 
French  wine  meets  no  obstacle  in  the  preference  of  the  inhabi 
tants  for  spirituous  liquors,  strong  beer,  the  cheap  and  strong 
wines  of  Portugal,  Spain,  Sicily,  Teneriffe,  Madeira,  and  the 
Cape  —  suppose  that  England  increases  her  actual  consumption 
of  French  wines  in  the  proportion  of  Netherlands,  the  consump 
tion,  calculated  according  to  the  population,  would  reach  five  or 
six  millions  of  gallons,  and  would  be,  consequently,  ten  or  fifteen 
times  more  than  at  present. 

At  first  sight  this  would  appear  to  be  for  France  and  French 
vineyards  a  brilliant  prospect ;  but,  examined  more  closely,  a 
very  different  opinion  may  strike  us. 

Under  the  greatest  possible  liberty  of  commerce,  we  will  not 
say  absolute  free  trade,  though  Dr.  Bowring's  principles  and 
arguments  authorize  us  to  do  so,  it  cannot  be  doubted  that  Eng 
land  would  obtain  possession,  to  a  great  extent,  of  the  French 
market  for  her  manufactures,  especially  her  woollen  stuffs,  her 
cotton  goods,  her  linen,  her  iron,  hardware  and  crockery.  At 


MANUFACTURING    INDUSTRY.  327 

the  lowest  estimate,  we  may  admit,  that  manufactured  pro 
ducts  being  thus  reduced  in  France,  there  would  be  a  million 
of  men  less  in  the  cities,  and  a  million  of  men  less  would  be 
employed  in  the  fields,  supplying  the  cities  with  raw  materials 
and  food.  Now,  Dr.  Bowring  himself  estimates  the  consumption 
of  the  inhabitants  of  the  country  at  16 J  gallons  a  head,  and 
that  of  the  inhabitants  of  cities  at  double,  or  33  gallons.  The 
diminution  of  the  manufacturing  industry  of  the  country,  thus 
brought  about  by  free  trade,  would  then  result  in  a  reduction 
of  the  domestic  consumption  of  wines  of  50  millions  of  gallons, 
whilst  the  export  would  be  increased  but  5  or  6  millions.  An 
operation  by  which  a  certain  loss  in  the  domestic  consumption 
would  be  ten  times  greater  than  the  eventual  gain  from  abroad 
could  hardly  be  esteemed  of  advantage  to  the  cultivators  of  the 
vine  in  France. 

In  short,  it  is  with  the  production  of  wine,  as  with  that  of 
meal,  corn,  and  food  generally,  as  well  as  of  raw  materials,  in  a 
great  country  having  a  vocation  for  manufacturing  industry ; 
the  production  of  the  manufactures  of  the  country  occasions  a 
ten  or  twenty-fold  greater  demand  for  the  agricultural  products 
of  the  temperate  zone,  and  exerts,  of  course,  a  proportionably 
greater  influence  upon  rents,  and  upon  the  exchangeable  value 
of  lands,  than  the  most  active  exportation  of  the  same  products. 
The  rate  of  rents  and  the  exchangeable  value  of  land  in  the 
vicinity  of  a  great  city,  compared  with  the  same  in  remoter  dis 
tricts,  though  connected  with  the  former  by  roads  and  the  rela 
tions  of  business,  furnish  the  most  conclusive  evidence  of  this. 

The  theory  of  rent  may  be  considered  taking  value  as  the  point 
of  view,  or  from  the  point  of  productive  power ;  private  interest 
may  also  be  taken  into  account ;  for  instance,  the  relations  between 
land-owners,  tenants,  and  laborers ;  or  public  and  national  in 
terest  may  be  the  chief  object  in  view.  The  School  has  generally 
looked  upon  this  theory  from  the  side  of  private  economy.  So  far 
as  we  know,  for  instance,  it  has  never  been  explained  why  the 
consumption  of  rent  is  more  advantageous  when  it  takes  place 
near  to  the  point  of  production ;  why,  nevertheless,  in  different 


328  THEORY. 

States,  rent  is  generally  consumed  where  the  sovereign  resides 
in  capitals  or  large  cities,  far  from  the  districts  in  which  it  has 
been  produced,  and  of  course  in  a  manner  of  less  advantage  to 
agriculture,  to  the  useful  arts,  and  to  the  development  of  the 
intellectual  power  of  the  country.  Where  the  landed  nobility 
possess  neither  privileges  of  any  kind,  nor  political  influence, 
unless  it  be  that  of  living  at  court,  or  being  in  the  employ  of 
the  sovereign,  where  all  public  power  is  concentrated  in  the 
capital,  land-owners  are  attracted  toward  that  central  point, 
unable  to  find  elsewhere  the  means  of  satisfying  their  ambition, 
and  the  opportunity  of  spending  pleasantly  their  income. 

The  more  a  large  proportion  of  them  become  accustomed  to 
life  in  the  capital,  and  the  less  life  in  the  province  affords  to 
each  individual  the  social  intercourse,  and  delicate  enjoyment, 
suited  at  once  to  body  and  mind ;  the  more  the  province  repels, 
the  more  the  capital  attracts  them.  The  province  thus  loses 
almost  all  its  means  of  progress,  means  which  the  consumption 
of  its  rent  would  have  furnished,  but  especially  those  manufac 
tures  and  that  intellectual  labor  which  the  consumption  of  rent 
would  have  encouraged  and  sustained ;  the  chief  cities  carry  off 
these  advantages.  The  capital  shines  in  the  concentrated  benefit 
of  all  the  talents,  education,  and  nearly  all  the  industry  devoted 
to  luxury.  But  the  provinces  are  thus  deprived  of  the  intellec 
tual  power,  of  the  material  means,  and  particularly  of  those 
branches  of  industry  which  aid  and  encourage  the  cultivation 
and  improvement  of  land.  This  explains,  in  a  good  degree, 
why,  in  France,  during  the  period  of  absolute  monarchy,  with  a 
capital  surpassing  in  splendor  and  intelligence  all  the  continental 
cities  of  Europe,  agriculture  made  such  small  progress,  and  why 
intellectual  culture  and  the  useful  arts  have  advanced  so  little 
in  the  provinces.  But  in  proportion  as  landed  nobility  became 
more  independent  of  the  sovereign,  and  obtained  more  influence 
over  legislation  and  in  the  public  administration ;  as  the  repre 
sentative  system  and  the  administrative  organization  became 
extended  over  cities  and  provinces,  giving  them  the  privilege  of 
managing  their  affairs,  and  of  participating  in  the  legislation 


MANUFACTURING    INDUSTRY.  329 

and  administration  of  the  country,  and  as  it  becomes  possible  to 
obtain  more  consideration  and  influence  in  the  provinces  and  by 
the  provinces,  the  landed  nobility,  the  educated  and  wealthy 
commoners  become  more  reconciled  to  remain  in  the  districts 
whence  they  derive  their  income ;  the  consumption  of  rent  then 
begins  at  once  to  exercise  a  favorable  influence  upon  the  deve 
lopment  of  intellectual  power,  upon  social  institutions,  upon  the 
progress  of  agriculture,  and,  in  the  interior  of  the  provinces, 
upon  the  progress  of  the  more  useful  departments  of  industry. 

The  economical  condition  of  England  may  be  cited  in  support 
of  this  remark.  The  sojourn  of  the  English  proprietors,  upon 
their  estates,  during  the  greater  part  of  the  year,  contributes, 
in  various  ways,  to  the  prosperity  of  agriculture ;  directly,  be 
cause  the  proprietor  devotes  a  part  of  his  income  to  agricultural 
enterprises  and  improvements,  or  by  giving  aid  to  his  tenants ; 
indirectly,  because  his  consumption  sustains  the  manufactures 
and  the  intellectual  activity  of  the  vicinity.  Such  is,  in  part, 
the  cause  why,  in  Germany  and  Switzerland,  where,  although 
destitute  of  great  cities,  and  the  best  means  of  communication 
on  a  large  scale,  and  of  great  national  institutions,  agriculture 
and  civilization  in  general  are  much  more  advanced  than  in 
France. 

The  greatest  error,  however,  made  by  Adam  Smith  and  his 
School  in  this  matter,  is  that  which  we  have  already  indicated, 
but  which  we  shall  now  more  fully  notice ;  that  is,  not  clearly 
comprehending  and  imperfectly  stating  the  influence  of  manu 
factures  on  the  increase  of  rent,  the  exchangeable  value  of  pro 
perty  in  land  and  agricultural  capital,  and  opposing  agricultural 
to  manufacturing  industry,  by  representing  the  former  as  much 
more  important  to  the  country,  as  the  source  of  a  much  more 
durable  prosperity.  In  all  this,  Smith  has  only  prolonged  the 
error  of  the  physiocrats,  though  not  without  modifications.  It 
is  plain  that  he  has  been  deceived  by  the  fact,  that  in  countries 
the  most  devoted  to  manufactures,  as  has  been  shown  in  the 
case  of  England  from  actual  statistics,  the  material  capital  of 
agriculture  is  ten  or  twenty-fold  greater  than  that  of  manufac 
turing  industry,  and  that  the  yearly  production  of  the  one  vastly 


330  THEORY. 

surpasses  in  value  the  collective  capital  of  the  other.*  The 
physiocrats  may  perhaps  have  been  led  by  the  same  fact  to 
exaggerate  the  merit  of  agriculture  in  opposition  to  manufac 
turing  industry.  Superficial  observation  may  lead  to  the  conclu 
sion,  indeed,  that  as  agriculture  creates  ten  times  more  wealth, 
it  should  of  course  stand  ten-fold  higher  in  our  esteem,  and  be 
regarded  as  ten-fold  more  important  than  manufactures.  But 
this  is  only  in  appearance.  When  we  seek  the  causes  of  the 
prosperity  of  agriculture,  we  find  the  most  important  to  be 
manufacturing  industry.  The  218  millions  sterling  of  manu 
facturing  capital  have,  in  great  part,  called  into  existence  the 
agricultural  capital  of  3,311  millions.  This  influence  has  been 
direct,  as  in  the  case  of  improved  means  of  communication  the 
capital  expended  in  the  construction  of  a  canal,  is  that  which 
increases  the  value  of  the  lands  situated  within  the  range  of 
its  business.  If  it  ceases  to  be  employed  as  a  canal  for  trans 
portation,  if  the  water  is  diverted  to  the  purposes  of  irrigation 
of  meadows,  that  is  to  the  apparent  advantage  of  agriculture 
and  of  the  rent  of  land ;  and  if  the  value  of  the  meadows  be 
thus  increased  to  the  amount  of  millions,  this  change,  appa 
rently  useful  to  agriculture,  will  diminish  in  a  proportion  ten- 

*  We  read  in  the  Wealth  of  Nations,  Book  II.,  Chap.  V.,  that  of  all  the 
modes  in  which  capital  can  be  employed,  agriculture  is,  without  contradic 
tion,  the  most  advantageous.  Nature,  it  is  there  said,  has  done  nothing  for 
man  in  manufactures ;  so,  not  only  does  the  capital  employed  in  the  culture 
of  land  bring  into  activity  a  greater  quantity  of  productive  labor  than  a 
like  capital  employed  in  manufactures,  but  it  adds  a  greater  value  to  the 
annual  product  of  the  earth,  and  of  the  labor  of  the  country.  This  includes 
a  material  error  which  our  author  has  refuted.  Adam  Smith,  however,  al 
though  influenced  by  the  doctrines  of  the  physiocrats,  was  very  far  from 
partaking  of  their  prejudices  against  manufacturers ;  in  the  criticism  upon 
their  system  which  is  found  in  Chap.  IX.  of  Book  IV.,  he  shows  specially 
his  perfect  comprehension  of  that  close  union  between  agriculture  and 
manufacturing  industry,  which  List  has  here  so  vigorously  sketched: — 
"  Whatever  besides  tends  to  diminish  in  any  country  the  number  of  artifi 
cers  and  manufacturers,  tends  to  diminish  the  home  market,  the  most  im 
portant  of  all  markets  for  the  rude  produce  of  the  land,  and  thereby  still 
further  to  discourage  agriculture."  —  [H.  R.] 


MANUFACTURING    INDUSTRY.  331 

fold  greater,  the  collective  value  of  the  properties  situated  near 
the  canal. 

From  this  point  of  view,  the  fact  that  the  manufacturing 
capital  of  a  country  is  small,  compared  with  its  agricultural 
capital,  leads  to  conclusions  very  different  from  those  which  have 
been  deduced  hy  the  present  School,  and  that  which  preceded  it. 

Hence,  it  follows  that  the  maintenance  and  the  extension  of 
manufacturing  industry  are  the  more  important  to  agriculturists 
even  in  regard  to  agriculture,  as  it  employs  or  absorbs  but  a 
small  capital.  It  must  then  be  obvious  to  agriculturists,  and 
especially  to  proprietors  who  are  in  reception  of  rents,  that 
their  interest  is  to  establish  and  sustain  manufactures  in  the 
country,  even  at  the  risk  and  trouble  of  applying  a  portion  of 
their  own  capital,  without  hope  of  return,  to  that  purpose,  just 
as  it  is  advantageous  to  construct  roads,  canals,  and  railways, 
without  receiving  from  them  any  direct  income.  If  we  regard 
in  this  light  the  very  indispensable  manufacture  of  flour  and 
meal,  so  useful  to  agriculture,  the  justness  of  our  remark  will 
appear  obvious.  Compare  the  value  of  land  and  the  rate  of 
rents  in  districts  where  there  are  no  flour-mills  within  the  reach 
of  cultivators,  with  other  places  where  that  manufacture  is  fully 
pursued,  and  it  will  be  seen,  at  once,  what  a  powerful  influence 
this  single  industry  exerts:  that  of  lands  of  equal  fertility, 
those  which  have  commercial  access  to  flouring-mills  are  in 
creased  in  value,  not  merely  double,  but  even  ten  or  twenty 
times  the  amount  of  the  capital  invested  in  the  mills,  and  that 
proprietors  will  find  a  sure  advantage  in  building  such  mills  at 
their  common  expense,  and  in  delivering  them  as  a  present  to 
the  miller.  This,  in  fact,  takes  place  frequently  in  the  more 
secluded  districts  of  North  America,  where,  when  the  millers 
have  not  sufficient  capital  to  construct  the  proper  mills  entirely 
at  their  own  expense,  the  proprietors  willingly  lend  their  assist 
ance  by  manual  labor,  cartage,  delivery  of  timber,  and  in  other 
ways.  The  same  thing  takes  place  also,  though  in  a  different 
form,  in  countries  of  older  culture ;  no  doubt  the  privileges  of 
the  seignorial  mills  have  had  their  origin  in  an  agreement  be- 


332  THEORY. 

tween  the  lord  and  the  cultivators,  by  which  they  bound  them 
selves  to  resort  to  mills  built  at  their  instance. 

What  we  say  of  corn-mills,  can  be  said  too  of  saw-mills,  oil- 
mills,  plaster-mills,  forges,  etc. ;  it  is  easy  to  prove  that  rents 
and  the  value  of  the  soil  are  always  increasing  in  proportion  as 
the  lands  are  in  the  vicinity  of  such  works,  and  as  the  latter  are 
in  more  intimate  connexion  with  agriculture.  . 

And  why  should  it  not  be  so  with  manufactures  of  wool, 
linen,  flax,  hemp,  paper,  and  cotton,  and  other  branches  of 
manufacturing  industry  ?  Do  we  not  see  the  rent  and  the  value 
of  the  soil  augment  everywhere  in  proportion  as  the  land  is 
nearer  to  a  city  and  as  the  city  is  more  or  less  populous  and 
industrious?  If  in  small  districts  we  calculate,  on  the  one 
hand,  the  value  of  the  farm  land  and  of  the  capital  employed 
in  them,  and  on  the  other  hand  that  of  the  capital  invested  in 
manufactures,  and  if  we  compare  them  together,  we  shall  always 
find  that  the  former  is  ten-fold  greater  than  the  latter.  It 
would  be  folly  to  conclude  thence,  that  it  is  more  advanta 
geous  for  a  nation  to  devote  its  material  capital  to  agriculture 
than  to  manufacturing  industry,  and  that  agriculture  is  of  itself 
more  favorable  to  the  increase  of  capital.  The  increase  of  the 
material  capital  of  agriculture  depends,  in  great  part,  on  the 
material  capital  of  manufacturing  industry,  and  the  nations  that 
disregard  this  truth,  however  favored  they  may  be  by  nature  for 
husbandry,  not  only  do  not  advance  in  wealth,  in  population, 
civilization  and  power,  but  they  retrograde. 

It  is  not,  however,  uncommon  for  land-owners  to  regard  this 
policy,  which  is  designed  to  introduce  manufacturing  industry 
into  a  country,  as  a  special  privilege,  if  not  a  monopoly,  conferred 
upon  manufacturers,  and  of  which  the  burden  falls  upon  them. 
Those  who,  in  the  beginning,  prize  so  highly  the  advantages 
which  the  proximity  of  flouring-mills,  saw-mills,  or  forges  affords 
them,  that  they  do  not  hesitate  to  co-operate  in  erecting  them 
to  the  extent  of  considerable  sacrifices,  should  not  fail  to  com 
prehend,  in  a  more  advanced  stage  of  civilization,  the  immense 
benefits  derived  by  agriculture  from  a  fully  developed  national 
manufacturing  industry,  and  how  very  important  it  is  to  submit 


MANUFACTURING    INDUSTRY.  333 

lo  tiie  sacrifices  needful  to  attain  and  secure  such  advantages. 
The  reason  is,  that  except  in  a  few  highly  advanced  nations, 
proprietors  understand  very  well  their  immediate  interests,  but 
are  blind  to  those  more  indirect  or  remote. 

Nor  must  it  be  forgotten  that  the  reigning  theory  has  con 
tributed  its  full  share  in  disturbing  the  opinions  of  the  proprie 
tors.  Adam  Smith  and  Say  have  exerted  themselves,  on  the  one 
hand,  to  brand  the  efforts  of  manufacturers  to  secure  protection 
for  their  industry  as  the  dictates  of  selfishness ;  and,  on  the  other, 
to  boast  of  the  generosity  and  disinterestedness  of  proprietors 
as  if  they  were  very  far  from  claiming  for  themselves  such 
favors.* 

One  would  think  that  the  attention  of  land-owners  being  thus 
turned  towards  this  disinterestedness  attributed  to  them  as  a 
great  virtue,  they  had  been  induced  to  give  it  up  as  unprofitable. 
For  in  most  of  the  important  manufacturing  States  the  proprie 
tors  of  the  present  day  have  sought  and  obtained  protection  by 
duties,  and  this  to  their  great  prejudice,  as  we  have  heretofore 
shown.  When,  previously,  proprietors  incurred  certain  sacrifices 
to  naturalize  manufacturing  industry,  they  acted  just  like  the 
cultivators  in  the  remote  places  who  contribute  to  the  building 
of  mills  and  forges  in  their  own  neighborhoods.  When  in  our 
time  protection  is  claimed  by  agriculture,  it  is  as  if  the  cultivator 
of  whom  we  were  speaking,  after  having  assisted  in  the  con 
struction  of  a  mill,  should  ask  the  miller  to  assist  him  in  the 
culture  of  his  lands.  This  would  be  a  foolish  demand.  Agri 
culture  can  flourish,  rents  and  the  value  of  land  can  advance, 
only  in  proportion  as  manufactures  and  trade  flourish,  and 
manufactures  cannot  prosper  where  the  import  of  raw  materials 
and  food  is  impeded.  This  is  everywhere  understood  by  manu- 

*  Smith,  in  particular,  exhibits  for  land-owners  a  partiality,  and  a  preju 
dice  against  manufacturers,  which  is  surprising  in  so  liberal  a  mind.  He 
carries  it  so  far  as  to  pretend  that  the  private  interest  of  proprietors  is 
always  identical  with  the  public  interests.  What  would  he  now  say  on 
seeing  his  doctrine  of  free  trade  introduced  by  the  manufacturers,  for  whom 
he  had  so  little  esteem,  and  made  the  law  of  the  land  in  spite  of  the  selfish 
opposition  of  landed  proprietors,  upon  whom  he  lavishes  so  many  eulogies  ? 
-[H.R.] 


334  THEORY. 

facturers.  If,  however,  proprietors  have,  in  most  of  the  great 
States,  obtained  protective  duties,  there  has  been  for  this  a 
double  cause.  In  the  representative  States  their  influence  on 
legislation  has  been  powerful,  and  manufacturers  have  not  ven 
tured  to  oppose  vigorously  their  foolish  attempts,  from  apprehen 
sion  of  making  the  proprietors  favorable  to  free  trade;  they 
preferred  making  terms  with  them. 

The  School  has,  moreover,  insinuated  to  owners  of  land  that 
it  was  as  extravagant  to  establish  manufactures  by  factitious 
means  as  to  produce  wine  in  hot-houses  in  a  frigid  clime,  that 
manufactures  come  of  their  own  accord  in  the  natural  course  of 
events,  that  agriculture  offers  many  more  chances  of  increasing 
capital,  that  the  capital  of^a  country  cannot  be  augmented  by 
any  artificial  methods,  that  the  intervention  of  law  and  public 
regulation  can  only  give  it  a  direction  less  favorable  to  the 
development  of  wealth. 

Finally,  as  the  influence  of  manufacturing  industry  upon 
agriculture  could  not  be  disregarded,  it  has  been  attempted  to 
prove  that  influence  to  be  both  feeble  and  vague.  Manufactures, 
it  is  said,  have  indeed  an  influence  on  agriculture,  and  what  is 
injurious  to  manufactures  is  injurious  to  agriculture ;  but  of 
course  they  tend  to  advance  the  rent  of  land  only  indirectly  : 
what  directly  influences  rent,  is  the  increase  of  population,  of 
cattle,  rural  improvements,  and  the  amelioration  of  routes  of  trans 
portation.  This  distinction  between  direct  and  indirect  influences, 
recalls  similar  distinctions  made  by  the  School ;  as,  for  example, 
in  regard  to  intellectual  production ;  and  here  we  may  again 
resort  to  a  comparison  we  have  already  used :  The  fruit  of  the 
tree  would  be  clearly  indirect,  in  the  sense  of  the  School,  because 
it  grows  upon  the  twig,  which  is  the  product  of  the  branch,  which 
is  the  product  of  the  trunk,  which  proceeds  from  the  root,  which 
is  the  only  direct  product  of  the  ground.  Is  it  not  altogether 
sophistical,  to  represent  the  population,  cattle,  railroads,  canals, 
and  roads,  as  direct  causes,  and  manufacturing  industry  as  an 
indirect  cause  of  the  rise  of  rents,  when  a  simple  glance  at  a 
large  manufacturing  country  shows  that  manufactures  are  the 
principal  causes  of  the  increase  of  population,  cattle,  railways, 


MANUFACTURING    INDUSTRY.  335 

canals,  roads,  etc.  ?  Is  it  logical  or  consistent  to  refer  these 
effects  to  their  cause,  manufactures ;  then  to  represent  them  as 
principal  causes,  and  subordinate  them  to  manufactures  as  an  in 
direct,  and  in  some  sort,  accessory  cause  ?  What  could  so  becloud 
a  clear  mind  like  that  of  Adam  Smith,  as  to  induce  him  to  give 
way  to  reasoning  so  incorrect  —  so  at  variance  with  the  nature 
of  things,  if  the  intention  were  not  to  cast  into  the  shade  manu 
factures,  and  their  influence  on  the  national  prosperity  and 
power  in  general,  upon  the  advance  of  rents  and  upon  the  value 
of  the  soil  in  particular?  And  why  that,  if  not  to  escape 
explanations,  the  result  of  which  would  have  been  strongly  in 
favor  of  protection  ? 

Since  Adam  Smith,  the  School  has  in  general  been  unfor 
tunate  in  its  researches  into  the  nature  of  rent.  Ricardo,  .and 
after  him,  Mill,  McCulloch,  and  others,  are  of  opinion  that 
rent  is  the  price  of  the  natural  fertility  of  the  soil.*  The  first 
named  has,  upon  this  idea,  constructed  quite  a  system.  An 
excursion  into  Canada  would  have  afforded  him  proofs,  in  every 
valley  and  on  every  hill,  that  his  theory  was  built  upon  sand. 
But  having  only  England  in  view,  he  falls  into  the  error  of  sup 
posing  that  the  English  fields  and  meadows,  the  apparent  natural 
fertility  of  which  produces  such  large  returns  in  the  shape  of 
rent,  have  been  always  the  same.  The  natural  fertility  of  the 
soil  is  at  the  beginning  so  insignificant,  and  yields  its  owner  so 
small  a  surplus  of  products,  that  it  scarcely  deserves  the  name 
of  rent.  The  whole  of  Canada,  in  its  primitive  state,  inhabited 

*  Mr.  Richelot,  in  a  note  to  the  French  translation  at  this  point,  reproves 
the  author  for  the  light  manner  in  which  he  here  speaks  of  the  various 
theories  of  rent.  We  do  not  reproduce  his  remarks,  because  we  regard  the 
multifarious  speculations  and  theories  of  political  economists  on  the  subject 
of  rent  as  so  imperfect  and  unsatisfactory,  that  we  cannot  reproach  List 
for  his  want  of  respect  for  them.  However  contradictory  opinions  are  upon 
all  the  principal  topics  of  political  economy,  the  doctrine  of  rent  seems 
the  most  unsettled  of  all.  We  frankly  confess  we  have  seen  no  theory  on 
that  subject  to  which  we  can  subscribe.  It  is  the  opinion  of  many  that  our 
own  distinguished  economist,  Mr.  Carey,  has  very  effectually  refuted  the 
more  popular  European  theories  of  rent.  That  is  a  real  service  to  science. 
-[S.C.] 


336  THEORY. 

only  by  hunters,  would  hardly  have  yielded  in  meat  and  skins  a 
sufficient  income  to  pay  a  professor  of  political  economy  at 
Oxford.  The  natural  productive  capacity  of  the  soil  in  the 
island  of  Malta  consists  of  stones,  from  which  it  would  he  very 
difficult  to  obtain  a  rent.  If  we  follow  the  traces  of  civilization 
among  nations,  their  transition  from  the  condition  of  hunters  to 
that  of  shepherds,  from  the  latter  to  that  of  husbandmen,  we 
shall  readily  understand  that  everywhere  land  yielded  at  first 
no  rent,  and  that  rents  have  arisen  with  the  progress  of  culture 
and  population,  with  the  increase  of  intellectual  and  material 
capital.  If  we  compare  a  purely  agricultural  nation  with  a 
nation  at  once  agricultural,  manufacturing  and  mercantile,  we 
shall  find  that  there  are  twenty-fold  more  persons  living  on  the 
rent  of  land  in  the  latter  than  in  the  former.  According  to 
Marshal's  Statistics  of  Great  Britain,  the  population  of  England 
and  Scotland  amounted,  in  1831,  to  16,537,398,  of  whom 
1,116,398  were  receivers1  of  rents.  In  Poland,  in  the  same 
extent  of  territory,  the  twentieth  of  this  number  could  scarcely 
have  been  found. 

If,  from  these  general  remarks  we  descend  to  particulars,  and 
if  we  inquire  what  has  determined  the  rent  of  each  farm,  we 
shall  find  everywhere  that  it  is  the  result  of  a  productive  capa 
city,  which,  far  from  being  a  liberality  of  nature,  has  been  cre 
ated  by  the  application  of  labor,  of  intellect,  and  material 
capital,  directly  or  indirectly  applied  to  each  farm,  and  by  the 
progress  of  society  in  general.  There  are,  it  is  true,  lands 
never  touched  by  the  hand  of  man  which  pay  rent,  for  instance, 
/  quarries,  sand-pits,  and  pastures ;  but  this  rent  is  only  the  effect 
of  increase  of  culture,  capital,  and  population  in  the  vicinity. 
On  the  other  hand,  it  must  be  noted  that  the  lands  yielding  the 
highest  rents  are  those  the  natural  fertility  of  which  has  been 
completely  annihilated,  as  in  the  case  of  lands  occupied  for 
building  purposes. 

The  principle  of  rent  is  the  exclusive  benefit  which  the  owners 
of  land  derive  from  its  exclusive  possession,  and  the  extent  of 
that  benefit  is  measured  by  the  existing  intellectual  and  material 
capital  in  society ;  the  advantage  of  particular  localities,  special 


MANUFACTURING    INDUSTRY.  337 

qualities  of  soil,  and  the  capital  employed,  must  also  be  taken 
into  account  in  ascertaining  the  sum  of  the  benefits  to  be  received 
by  the  owner  of  land  in  the  shape  of  rent. 

Rent  is  the  interest  of  capital  invested  in  land,  a  fixed  revenue 
issuing  out  of  land.  But  the  soil  of  a  country  of  which  the 
lands  are  cultivated  in  the  imperfect  way,  which  is  the  custom 
in  nations  purely  agricultural,  must  be  rented  at  far  less  rates, 
and  the  fixed  income  or  revenue  issuing  from  lands  thus  em 
ployed,  must  be  far  less  than  in  a  country  uniting  agriculture 
with  manufactures.  The  proprietors  of  the  former  live,  for  the 
most  part,  in  the  country  from  which  they  purchase  their  manu 
factured  articles.  But  when  a  nation,  the  agriculture  and 
population  of  which  have  already  made  considerable  progress, 
establishes  manufactures,  it  capitalizes  not  only  its  land,  as  re 
marked  in  a  former  chapter,  but  that  natural  power,  so  especially 
available  in  manufactures,  and  which  before  may  have  been 
wholly  without  value,  but  also  the  greatest  part  of  the  manufac 
turing  power  employed  in  the  service  of  agriculture.  The  in 
crease  of  rents  is  of  course  much  greater  than  the  interest 
of  the  material  capital  necessary  for  the  establishment  of 
manufactures.* 

*  The  influence  of  manufacturing  industry  upon  agricultural  prosperity 
has  been  long  remarked  and  acknowledged.  Josiah  Child,  an  old  English 
writer,  compared  land  and  industry  to  twins  who  grow  and  thrive  together, 
and  who  sicken  and  perish  at  the  same  time.  Hume's  Essay  on  Commerce, 
and  the  Chapter  on  the  Wealth  of  Nations,  which  has  for  its  title.  How  the 
commerce  of  the  towns  contributed  to  the  improvement  of  tJie  country,  main 
tains  the  same  proposition.  It  is  constantly  seen  in  the  English  parlia 
mentary  reports  and  debates  on  the  subject  of  imports.  In  handling  it  in 
the  foregoing  chapter,  List  brings  to  it  not  only  his  usual  vigor,  but  he 
regards  it  from  a  different  point  of  view.  His  remarks  are  the  more  worthy 
of  attention,  as  it  is  not  rare  to  hear  among  us  pretended  friends  of 
agriculture  declaiming  against  manufacturing  industry.  —  [H.  R.] 

It  is  surprising  that  it  is  still  necessary  to  make  such  explanations  as  are 
found  in  the  text  and  note  above.  The  manufacturers,  as  a  class,  could  not 
exist  if  their  products  were  not  wanted :  if  their  products  are  wanted,  the 
producers  are  a  necessary  class.  If  clothing,  and  houses,  and  furniture, 
are  not  as  essential  to  life  as  food,  they  are  nevertheless,  by  general  con 
sent,  regarded  as  necessaries  of  life.  In  the  present  stage  of  society,  it  is 
22 


338  THEORY. 

CHAPTER  XI. 
MANUFACTURING  INDUSTRY  AND  COMMERCE. 

WE  have  spoken  hitherto  only  of  the  relations  existing  be 
tween  agriculture  and  manufacturing  industry,  because  these 
alone  constitute  the  essential  elements  of  national  production, 
and  because,  without  having  previously  a  clear  idea  of  those 
relations,  we  cannot  understand  exactly  the  functions  and  the 

a  folly  to  make  distinctions  bet-ween  the  several  classes  of  producers  as  to 
their  respective  importance.  All  are  equally  important  and  indispensable 
to  society  as  at  present  constituted.  Society  has  so  apportioned  its  produc 
tive  labor  for  its  own  purposes.  The  manufacturer  who  furnishes  the  ma 
terials  for  clothes,  for  furniture,  for  buildings,  is  just  as  valuable  a  member 
of  the  community  as  the  farmer  who  furnishes  wheat  and  beef.  The  mutual 
exchange  of  mutual  productions,  which  goes  on  between  the  different  classes 
of  producers,  is  of  their  own  arranging,  and  for  mutual  advantage.  They 
are  equally  necessary  to  each  other,  and  to  all  the  non-producing  classes. 
How  then,  in  an  economical  point  of  view,  can  any  distinction  be  made  as 
to  the  respective  importance  of  each  ?  If  the  farmer  must  wear  the  product 
of  the  loom,  he  is  as  much  favored  when  he  receives  it  as  the  manufacturer 
is  in  the  receipt  of  flour  and  beef.  The  real  problem  of  political  economy 
is  to  place  all  the  parties  who  thus  consume  each  other's  products  side  by 
side,  that  the  agriculturist  may  have  a  market  for  those  products  of  his 
land  which,  from  their  bulk  and  nature,  will  not  bear  distant  transporta 
tion.  If  we  suppose  land  to  be  cultivated  according  to  the  most  approved 
mode  of  modern  agriculture,  including,  of  course,  that  rotation  of  crops, 
and  that  proportion  of  the  heavy  commodities,  such  as  potatoes,  turnips, 
and  other  roots,  fresh  meat,  vegetables,  fruit,  &c.,  which  are  abundantly 
produced  by  good  farming,  then  the  land  which  has  a  market  near  home 
for  this  whole  product  can  sustain  many  times  as  large  a  population  as 
that  which  has  a  market  only  for  its  cereal  crops. 

The  agriculture  of  the  United  States  could  not  feed  five  millions  of  people 
in  Europe ;  it  could  not  even  furnish  such  a  population  with  bread  at  that 
distance ;  but  it  could,  if  they  were  properly  distributed  over  its  whole 
surface,  and  by  a  proper  system  of  farming,  feed  at  home  a  hundred  mil 
lions  from  land  now  in  cultivation.  A  large  population,  thus  distributed, 
minister  to  each  other's  wants  with  such  economy  and  mutual  advantage, 
that  their  own  wants  are  not  only  fully  supplied,  but  a  large  surplus  is  left 
for  foreign  trade  and  the  purchase  of  such  articles  as  their  own  country 


MANUFACTURING    INDUSTRY.  339 

particular  character  of  trade ;  doubtless  trade  is  productive,  as 
maintained  by  the  School,  but  it  is  productive  in  quite  a  different 
sense  from  agriculture  and  manufacturing  industry.  The  two 
latter  produce  the  articles  which  trade  receives  and  distributes ; 
commerce  is  the  medium  of  exchange  between  agriculturists  and 
manufacturers,  between  producers  and  consumers.*  Hence,  it 

does  not  produce.  Land,  in  such  circumstances,  rises  to  its  highest  value, 
and  industry  has  its  fullest  reward.  The  product  of  industry  is  not  only 
the  largest,  but  the  expenses  of  the  distribution  or  mutual  exchange  are 
the  smallest.  The  system  of  industry  for  that  country,  agricultural,  ma 
nufacturing,  and  commercial,  is  complete.  To  accomplish  such  a  desirable 
result,  every  country  must  complete  its  own  system  before  it  mingles  in 
that  of  another,  and  before  it  permits  disturbing  influences  from  other 
countries.  —  [S.  C.] 

*  Commerce  is  strictly  an  agency  of  industry.  Its  object  is  to  distribute 
to  consumers  the  productions  of  labor.  It  is,  to  a  certain  extent,  an  indis 
pensable  agency,  but  only  in  the  same  sense  as  warehouses,  roads,  ships, 
wagons,  and  money.  It  is  an  expensive  agency,  and  is  therefore  to  be 
dispensed  with  whenever  it  can  be  with  advantage ;  and  its  expenses  are 
always  to  be  kept  to  the  lowest  point  consistent  with  its  effective  operations. 
The  production  of  commodities  and  their  consumption  being  the  object  o>f 
industry,  the  less  the  charges  upon  the  distribution  the  greater  the  advan 
tage  to  the  producers  and  consumers.  This  is  equally  true,  whether  applied 
to  foreign  or  domestic  trade. 

It  is  from  overlooking  these  plain  truths  that  some  of  the  chief  errors  of 
political  economists  have  arisen.  The  mercantile  theory  of  the  past  cen 
tury,  and  the  commercial  theory,  which  makes  free  trade  its  leading  dogma, 
of  the  present  day,  both  treat  commerce  as  a  principal,  and  not  an  agent. 
From  this  point  of  view,  both  exaggerate  its  importance,  as  well  as  mis 
take  its  true  position,  in  political  economy.  Every  operation  and  attribute 
of  commerce  must  be  considered  in  subserviency  to  industry  and  the  in 
terests  of  producers  and  consumers.  Commerce  is  not  to  have  any  control 
or  direction  of  industry:  its  business  is  to  listen  to  the  wants  of  the  people, 
to  the  demand  of  consumers,  and  to  obtain  the  commodities  which  will 
supply  these  wants,  and  convey  them  by  the  various  channels  of  trade  from 
producers  to  consumers.  It  cannot  be  doubted  that  every  facility  ought  to 
be  afforded  to  this  agency,  that  its  expenses  may  be  reduced.  But,  the 
business  being  subordinate  to  industry,  its  facilities  should  be  subordinate, 
and  not  likely  to  inflict  any  injury.  Every  nation,  having  its  own  system 
of  industry,  and  being  dependent  upon  that  for  nine-tenths  of  its  consump 
tion,  any  movement  of  foreign  trade  which  would  disturb  or  paralyze  this 
home  industry,  might  prove  a  serious  evil  to  producers,  and  of  course  to 
consumers. 


340  T  H  E  0  K  Y. 

follows  that  trade  should  be  regulated  according  to  the  require 
ments  of  agricultural  and  manufacturing  industry,  and  not  agri- 

The  idea  of  the  old  mercantile  theory  then,  that  wealth  was  chiefly  to  be 
sought  in  foreign  trade,  and  in  a  favorable  balance  which  would  bring  in 
money,  and  the  idea  of  the  reigning  School  that  all  that  is  needful  for  in 
dustry  is  to  make  trade  entirely  free  of  all  restraints,  are  equally  unsound 
and  unscientific.  They  both  overlook  the  great  fact  that  man  lives  by  labor, 
and  not  by  commerce.  Labor  and  production  must  be  the  starting-point 
from  which  all  economical  conclusions  must  be  developed.  The  older  theory 
errs  in  looking  upon  money  as  the  chief  item  of  wealth,  and  upon  foreign 
trade  as  the  chief  road  to  wealth.  If,  when  Great  Britain  is  alleged  to  have 
been  unduly  devoted  to  the  mercantile  system,  she  had  ten  millions  of  in 
habitants  who  were  well  clad  and  fed,  this  involved  an  annual  industry  of 
nearly  one  hundred  millions ;  or  say,  to  the  average  of  ten  pounds  sterling 
for  each  individual  of  the  population ;  or  if  this  be  considered  a  large 
estimate  for  the  value  of  the  average  consumption  of  the  people  of  Great 
Britain  from  the  middle  of  the  seventeenth  to  the  middle  of  the  eighteenth 
century,  call  it  seven  pounds  each,  which  implies  a  home  industry  of 
seventy  millions  for  clothing  and  food,  beside  what  was  applied  to  build 
ings  and  furniture.  The  people  of  Great  Britain  then,  expended  in  that 
period,  on  their  clothing  and  food  annually,  seventy  millions ;  but  the 
foreign  commerce  of  the  country,  during  that  period,  did  not  average  over 
seven  millions  yearly;  so  that  the  people  were  indebted  to  their  home 
industry  for  sixty-three  millions  out  of  seventy  of  their  consumption. 
Their  wealth  consisted  in  the  means  of  producing  this  seventy  millions, 
and  in  being  able  to  consume  it.  The  ability  to  bring  home  one  or  two 
millions  of  the  seven  millions  of  their  imports  in  gold  and  silver  was  of 
small  account.  When  received,  it  was  no  more  wealth  than  the  clothes  on 
their  backs  and  the  corn  in  their  cribs.  The  wealth  of  a  nation  cannot  be 
estimated  by  what  it  exports  or  imports,  for  this  must  always  be  a  small 
proportion  of  its  whole  production,  but  by  what  the  people  actually  con 
sume,  and  can  afford  to  consume.  A  very  large  production  of  manufac 
tured  commodities,  with  an  immense  foreign  trade,  may  be  cotemporaneous 
with  great  poverty  and  severe  privations  among  the  people ;  just  as  the  ma 
nufacturer  may  make  and  sell  goods  to  the  amount  of  a  million  yearly, 
without  profit  enough  to  support  his  family. 

We  have  said  that  the  reigning  School  fails  in  making  the  proper  dis 
tinction  between  industry  and  trade.  The  old  error  consisted  in  over-esti 
mating  the  importance  of  foreign  trade  as  a  means  of  obtaining  money, 
deemed  to  be  the  chief,  if  not  the  sole  constituent  of  wealth.  The  great 
error  of  the  modern  commercial  theory  is  in  looking  upon  international 
commerce  as  the  sole  and  proper  regulator  of  industry  as  a  productive 
power.  Instead  of  looking  to  the  interests  and  welfare  of  the  men  who 


MANUFACTURING    INDUSTRY.  341 

cultural  and  manufacturing  industry,  according  to  the  interests 
and  the  wants  of  commerce. 

But  the  School  has  taken  the  counterpart  of  that  maxim  by 
adopting  the  motto  of  Gournay,  "Laissezfaire,  laissez  passer" 
a  motto  not  less  suitable  to  highwaymen,  knaves,  and  swindlers, 
than  to  merchants,  and  which,  for  that  very  reason,  should  be 
regarded  with  suspicion.  That  insane  doctrine  which  sacrifices 
the  interests  of  agriculture  and  manufacturing  industry  to  the 
pretensions  of  commerce,  —  to  the  claims  of  absolute  free  trade, 
is  the  natural  offspring  of  a  theory  too  fully  preoccupied  with 
values,  and  too  little  with  productive  power,  and  which  regards 
the  whole  world  as  simply  a  republic  of  merchants,  one  and 
indivisible. 

The  School  does  not  perceive  that  the  merchants  can  attain 
their  object,  which  is  wealth,  by  profits  upon  the  commodities 
which  pass  through  their  hands  even  at  the  expense  of  agricul 
ture  and  manufactures,  at  the  expense  of  productive  power,  nay, 
even  at  the  expense  of  national  independence.  They  are  under 
no  necessity  from  the  nature  of  their  operations  and  purposes 
of  regarding  the  effect  which  the  goods  they  import  or  export 
have  upon  the  morality,  the  prosperity,  or  the  power  of  their 
country.  They  deal  in  poisons  as  readily  as  medicines.  They 
enervate  whole  nations  by  means  of  opium  and  brandy.  It  is 
no  concern  for  them  whether  their  goods  were  legally  imported 
or  were  smuggled,  whether  their  business  brings  employment 

are  the  producers  of  wealth,  its  laws  and  doctrines  are  developed  from  a 
consideration  of  wealth,  and  its  only  regard  for  the  interests  of  the  laborer 
is  shown  in  teaching  that,  if  trade  is  free,  and  men  are  allowed  to  shape 
their  own  course  in  what  regards  trade  and  industry,  all  will  come  right 
with  the  masses  of  men  who  labor.  The  error  involved  in  this  is  vital  and 
very  great.  Men  are  so  constituted,  and  so  unequally  endowed,  that  very 
few  ever  are  or  can  be  in  a  condition  to  make  their  free  choice  of  occupa 
tion  or  mode  of  life.  The  liberty  of  industry  and  trade  enures  under  this 
system  to  the  favored  few  who  have  capital,  talents,  and  position.  These 
men  will  carry  off  all  the  advantages  when  unrestrained  freedom  is  the 
rule.  The  very  object  of  society  is  protection  and  strength  for  the  weak. 
The  strong,  the  rich,  the  prudent  and  the  knowing,  can  take  care  of  them 
selves  ;  the  government  should  take  care  of  the  multitudes  who  can  pre 
tend  to  few  of  these  advantages.  —  [S.  C.] 


342  THEORY. 

I 

with  bread  to  hundreds  of  thousands,  or  millions,  or  reduces  as 
many  to  beggary,  provided  only  the  regular  profit  is  realized. 
If  their  starving  countrymen  attempt  by  emigration  to  escape 
the  miseries  of  unrequited  labor  or  no  labor  at  all,  the  profits  of 
carrying  them  bring  large  gains  to  their  coffers.  In  time  of 
war  they  are  ever  ready  for  gain  to  supply  the  enemy  with 
provisions,  arms,  and  ammunition.  They  would  sell  to  foreigners, 
if  it  were  possible,  even  the  cultivated  fields  and  meadows,  and 
after  having  extracted  the  last  dollar  from  the  industry  of  the 
country,  and  converted  the  land,  as  far  as  practicable,  into 
money,  they  would  embark  on  their  own  ships  for  other  countries 
and  new  fields  of  profit.* 

*  Whatever  be  the  exaggerations  to  whioh  the  maxim  of  laissez  passer 
has  given  rise,  it  ought  to  be  said  the  merchants,  as  such,  have  not  been 
prominent  advocates  of  free  trade.  It  was  advocated  by  the  physiocrats 
as  a  benefit  to  the  agricultural  interests.  "  Foreign  trade,"  said  Quesnay, 
(5th  Observation  in  his  Tableau  Uconomique,)  "ought  to  be  always  wholly 
free,  disembarrassed  of  all  hindrances,  and  free  of  imposts,  because  it  is 
by  the  communication  it  holds  with  foreign  nations  that  it  can  obtain  the 
highest  possible  price  for  the  productions  of  the  land.  Smith  and  his  dis 
ciples  have  combated  protection  as  an  interference  of  government  in  in 
dustry,  and  as  an  obstacle  to  a  rational  division  of  labor  in  general.  It  is 
well  known  that  in  some  countries  the  agriculturists  favor  free  trade,  and 
in  some  the  manufacturers,  as  their  interest  dictates ;  the  merchants,  for 
the  most  part,  side  with  the  particular  interest  with  which  they  are  more 
especially  connected,  whether  agricultural  or  manufacturing. 

It  is  evident  that  the  passage  above  was  written  by  List  under  unfavora 
ble  impressions  made  upon  him  by  the  commerce  between  the  Hanse  Towns 
and  the  great  Fairs  of  Germany.  The  reproaches  he  utters  against  mer- 
•  chants  might  as  well  be  made  against  farmers  and  manufacturers:  he 
accuses  the  first,  for  instance,  of  furnishing  to  the  enemy,  in  time  of  war, 
arms  and  munitions ;  but  those  who  produce  arms  and  munitions,  are  they 
not  as  guilty  before  their  country  ?  The  truth  is,  that  the  interests  of  any 
class  of  individuals  whatsoever  may  occasionally  come  in  direct  conflict 
with  the  public  interests.  It  is  curious  to  find  an  adversary  of  laissez  faire 
and  of  laissez  passer  concur,  without  being  aware  of  it  perhaps,  with  the 
chief  of  the  School  of  laissez  passer  and  of  laissez  faire.  Quesnay  has  written 
that  the  private  interests  of  merchants  and  the  interests  of  the  nation  are  op 
posed.  —  [U.  H.] 

The  famous  formula,  laissez  faire  et  laissez  passer,  which  contains  in 
these  few  words  the  main  dogma  of  the  modern  School,  is  attributed  to 


MANUFACTURING    INDUSTRY.  343 

It  is  clear  then,  that  the  interests  of  merchants  individually, 
and  that  of  the  commerce  of  whole  nations,  are  things  essen 
tially  distinct.  So  Montesquieu  says,  that  which  hinders  or 
restrains  merchants  does  not  always  equally  restrain  trade,  and 
men  are  nowhere  less  troubled  by  commercial  regulations  than 
in  countries  where  slavery  prevails.*  Trade  fattens  upon 
manufacturing  industry  and  agriculture,  and  in  our  days  no 
nation  can  have  an  important  trade,  domestic  or  foreign,  if  it 
has  not  carried  to  a  high  degree  of  perfection  those  two  princi 
pal  branches  of  production.  It  is  true  that  formerly  there  were 
cities,  or  confederate  cities,  which  found  in  foreign  manufacturers 
and  agriculturists  the  elements  of  a  great  intermediate  commerce ; 
but  now,  when  large  agricultural,  manufacturing,  and  mercantile 
states  have  arisen,  such  an  intermediate  commerce  as  that 
enjoyed  by  the  Hanse  Towns  will  never  be  again  witnessed.  At 
any  rate,  trade  of  this  kind  is  so  precarious  that  it  scarcely 
deserves  mention  in  comparison  with  that  having  for  its  basis 
the  actual  productions  of  the  country. 

The  most  important  objects  of  internal  trade  are  food,  salt, 
fuel,  timber,  woven  fabrics,  implements  of  agriculture  and 

Gournay,  a  friend  and  disciple  of  Quesnay.  It  claims  that  merchants 
shall  be  allowed  to  do  what  they  please,  and  omit  what  they  please  in 
their  occupation.  The  great  physiocrat  who  adopted  the  formula  regarded 
this  liberty  of  action  or  free  trade  only  from  the  side  of  agriculture.  He 
knew  that  the  interests  of  merchants  were  often  opposed  to  the  public  in 
terests,  but  he  thought  if  they  were  left  free  they  could  be  useful  in  finding 
the  best  market  for  agricultural  products.  He  little  thought  these  words 
would  become  the  formula  of  a  School  of  Economists  far  more  influential 
than  his  own,  and  that  it  would  be  lifted  above  its  subordination  to  the 
interests  of  agriculture,  and  be  made  the  sole  patron  of  the  interests  of 
labor. 

It  is  a  striking  fact  that  the  modern  School  has  adopted  two  great  errors 
from  their  predecessors  of  the  mercantile  theory  and  the  physiocrats.  From 
the  former  they  derive  their  devotion  to  foreign  trade  as  the  highest  interest 
of  a  nation,  and  from  the  second  their  idea  of  free  trade  as  the  great  means 
of  promoting  national  wealth  and  rewarding  industry.  These  points  are  main 
dogmas  of  the  modern  School,  but  are  not,  of  course,  original.  They  were 
main  dogmas  of  two  exploded  Schools,  whose  doctrines  are  thus  taken  and 
pressed  again  upon  the  acceptance  of  the  world.  —  [S.  C.j 

*  Esprit  des  Lois,  Book  XX.,  Chap.  XII. 


344  THEORY. 

manufacturing  industry;  these,  with  the  raw  materials,  from 
the  farm  and  from  the  mines,  are  the  prime  elements  of  manu 
factures.  In  a  country  where  manufacturing  industry  has 
reached  a  high  degree  of  perfection,  this  internal  trade  is  vastly 
larger  than  in  a  merely  agricultural  country.  In  the  latter,  the 
consumption  of  the  cultivator  is  reduced  nearly  to  his  own  pro 
duction.  For  want  of  an  active  demand  for  his  various  products, 
as  well  as  facilities  of  transportation,  he  is  obliged  to  produce 
for  himself  every  thing  he  needs,  whatever  may  be  the  special 
nature  of  his  soil ;  for  want  of  means  of  exchange  he  resorts  to 
household  industry  for  the  chief  part  of  his  clothing  and  other 
necessary  articles.  Fuel,  building  materials,  food,  and  minerals, 
have,  in  the  absence  of  good  roads,  but  a  limited  market,  and 
cannot  be  exported  to  distant  places ;  with  this  limited  market 
and  this  restricted  demand  there  can  be  no  stimulus  to  economy 
and  the  formation  of  capital.  So  in  purely  agricultural  coun 
tries,  scarcely  any  capital  is  devoted  to  internal  trade,  and  all 
products  exposed  to  vicissitudes  of  temperature  exhibit  extraor 
dinary  fluctuations  of  price ;  dearness  and  famine  are  nowhere 
more  to  be  feared  than  in  exclusively  agricultural  nations. 

It  is  the  development  of  domestic  manufactures  and  the 
improved  modes  of  communication  consequent  upon  them,  and 
the  increase  of  population,  which  promote  the  growth  of  internal 
trade  until  it  becomes  from  ten  to  twenty  times  more  important 
than  the  internal  transactions  of  a  purely  agricultural  nation, 
and  five  or  ten  times  more  than  its  own  most  flourishing  external 
commerce.  If  we  compare  the  internal  trade  of  England  with 
that  of  Poland  and  Spain,  we  shall  find  a  confirmation  of  this 
remark. 

The  external  commerce  of  the  agricultural  nations  of  the  tem 
perate  zone,  so  long  as  it  is  confined  to  food  and  raw  materials, 
cannot  be  considerable : 

1st.  Because  an  agricultural  nation  finds  markets  only  in  a 
small  number  of  manufacturing  nations,  which  have  their  own 
agriculture,  and  which,  owing  to  their  special  facilities  and  skill, 
and  the  extension  of  their  commerce,  they  practise  with  far 
greater  success.  A  market  thus  enjoyed,  can  never -be  certain 


MANUFACTURING    INDUSTRY.  345 

nor  constant.  The  commerce  of  rural  products  is  always  a 
matter  of  speculation,  the  profits  of  which  enure  chiefly  to  second 
hand  dealers,  and  but  seldom  to  the  advantage  of  agriculture, 
or  the  productive  power  of  the  country. 

2d.  Because  the  exchange  of  agricultural  products  for  foreign 
manufactured  articles,  is  frequently  interrupted  by  commercial 
restrictions  and  by  wars. 

3d.  Because  such  a  trade  is  carried  on  only  upon  the  sea 
and  river  shores,  but  does  not  concern  the  interior,  nor  the 
greatest  part  of  the  national  territory. 

4th.  Because  manufacturing  nations  find  it  their  interest 
to  import  their  food  and  raw  materials  from  any  quarter 
where  they  meet  most  ready  sale  for  their  fabrics.  The  sale 
of  German  wool  in  England  is  restricted  by  the  production 
of  Australia ;  the  market  for  French  and  German  wines,  in  the 
same  country,  by  those  of  Spain,  Portugal,  and  Sicily,  as  well 
as  of  Madeira,  the  Azores,  and  the  Cape ;  and  the  sale  of 
Prussian  timber,  by  importations  from  Canada.  The  attempt 
is  now  making  to  supply  England  with  cotton  from  the  East 
Indies.  If  the  English  succeed  in  re-opening  the  ancient  route 
of  commerce — -'if  the  new  State  of  Texas  becomes  firmly  esta 
blished —  if  civilization  makes  progress  in  Syria  and  Egypt,  in 
Mexico,  and  in  the  States  of  South  America,  the  cotton-planters 
of  the  United  States  will  soon  comprehend  that  the  home  market 
affords  the  surest,  the  most  constant,  and  the  most  durable 
demand. 

In  the  temperate  zone,  foreign  commerce  is  sustained  chiefly 
by  national  manufactures,  and  can  neither  be  preserved  nor 
increased  but  by  means  of  manufacturing  industry. 

Nations  producing  at  the  lowest  rates  every  kind  of  manu 
factured  goods,  can  alone  form  commercial  relations  with  coun 
tries  of  every  clime  and  every  grade  of  civilization ;  they  alone 
are  able  to  provide,  not  only  for  their  existing  wants,  but  they 
create  new  wants,  and  supply  them  also,  having  the  capacity  to 
take  in  return  raw  materials  and  commodities  of  every  variety. 
Such  nations  only  can  freight  their  ships  with  that  variety  of 
goods  required  by  countries  remote  and  destitute  of  manufac- 


346        ,  THEORY. 

tures.  It  is  only  when  the  freights  of  the  outward  voyage  cover 
the  expenses  of  the  voyage,  that  the  return  cargo  may  be  com 
posed  of  goods  of  less  value. 

The  people  of  the  temperate  zone  import  chiefly  products 
of  the  Southern  climes,  such  as  sugar,  coffee,  cotton,  tobacco, 
tea,  dye-stuffs,  cacao,  spices,  and  such  articles  as  are  designated 
by  the  name  of  colonial  goods.  These  commodities  are,  for  the 
most  part,  paid  for  with  manufactured  articles.  These  exchanges 
explain  specially  the  progress  of  industry  in  the  manufacturing 
countries  of  the  temperate  zone,  and  those  of  civilization  and 
labor  in  countries  of  the  torrid  zone.  They  constitute  divi 
sion  of  labor,  and  association  of  productive  power,  upon  the 
largest  scale.  In  ancient  times,  there  was  nothing  like  this 
great  national  exchange  of  goods,  which  is  the  work  of  the 
Dutch  and  the  English. 

Before  the  discovery  of  the  Cape  route,  the  East  greatly  sur 
passed  Europe  in  manufactures.  Except  the  precious  metals, 
small  quantities  of  cloth,  arms,  hardware,  and  some  articles  of 
luxury,  European  goods  found  there  almost  no  market.  The 
transportation  by  land  enhanced  the  price  of  the  articles  brought 
back,  as  much  as  that  of  the  goods  exported.  As  to  agricul 
tural  products,  and  common  manufactured  articles,  no  s"urplus 
of  production  existing  in  Europe,  they  could  not  be  sold  in 
exchange  for  silk  and  cotton  goods,  for  sugar  and  spices,  from 
the  East.  Whatever  has  been  written  on  the  importance  of 
Eastern  trade  at  that  time,  must  be  understood  relatively  ;  that 
commerce  was  important  only  at  that  time ;  it  was  insignificant 
compared  with  its  present  amount. 

The  trade  in  products  of  the  torrid  zone  became  more  active 
from  the  time  Europe  began  to  receive  from  America  large  sums 
in  the  precious  metals,  and  when  the  route  by  the  Cape  began 
to  be  commonly  used.  Nevertheless,  it  could  not  reach  a  vast 
development,  so  long  as  the  East  had  more  manufactured  goods 
to  sell  than  it  required  in  return. 

That  trade  is  indebted  for  its  present  importance,  to  the 
colonization  of  Europeans  in  the  East  and  West  Indies,  in 
North  and  South  America — to  the  enlarged  production  of  sugar 


MANUFACTURING  INDUSTRY.        847 

and  coffee  —  to  the  increased  growth  of  cotton,  rice,  indigo,  etc. 
— to  the  introduction  of  African  slaves  in  America  and  in  the 
West  Indies  —  to  the  remarkable  success  of  European  manu 
factures  over  those  of  the  East  Indies,  and  to  the  wide  extension 
of  Dutch  and  English  domination ;  two  nations,  which,  contrary 
to  the  policy  of  the  Spaniards  and  Portuguese,  have  sought  and 
found  fortune  rather  in  the  exchange  of  manufactured  articles 
for  Southern  commodities,  than  in  pillage  and  extortions. 

In  our  day,  this  trade  occupies  the  larger  part  of  the  grand 
commercial  marine  of  Europe,  as  well  as  of  the  mercantile  and 
manufacturing  capital  which  Europe  devotes  to  external  trade ; 
it  is  applied  to  the  goods  which  every  year,  to  the  value  of  many 
hundred  millions,  are  sent  from  the  torrid  to  the  temperate  zone, 
and  paid  for,  with  few  exceptions,  in  manufactured  articles. 

The  exchange  of  colonial  goods  for  manufactured  articles  aids, 
in  more  than  one  respect,  the  productive  power  of  countries  in 
the  temperate  zone.  Such  commodities,  for  instance,  as  sugar, 
coffee,  tea,  tobacco,  serve  partly  as  stimulants  to  agricultural 
and  manufacturing  production,  and  partly  as  articles  of  aliment. 
The  manufactures  exported  in  exchange  or  payment  for 
colonial  goods,  gives  employment  to  a  greater  number  of  work 
men,  manufacturing  being  carried  on  upon  a  larger  scale,  and 
therefore  with  more  economy  and  profit ;  a  greater  number  of 
ships,  sailors,  tradesmen,  find  occupation,  and,  the  population 
increasing  from  these  various  causes,  the  demand  for  agricul 
tural  products  increases  in  an  enormous  proportion. 

It  is  this  co-relation  between  the  manufacturing  industry  of 
the  temperate  zone  and  the  production  of  the  torrid  zone,  which 
explains  why  the  English  consume  on  the  average  two  or  three 
times  more  Southern  productions  than  the  French,  three  or  four 
times  more  than  the  Germans,  five  or  ten  times  more  than  the 
Poles. 

One  may  judge  of  the  extension  of  which  the  production  of 
the  warmer  climates  is  susceptible,  by  an  approximative  estimate 
of  the  superficies  of  land  now  required  for  the  culture  of  these 
commodities,  as  they  appear  now,  found  in  the  channels  of  trade. 

If  we  value  the  present  consumption  of  cotton  at  ten  millions 


348  THEORY. 

of  hundred  weights,*  and  the  product  of  an  acre  of  land  at 
only  eight  hundred  weights  (two  bales),  we  find  that  that  product 
requires  only  a  million  and  a  quarter  of  acres.  The  amount 
of  sugar  in  trade  being  estimated  at  fourteen  millions  of  hundred 
weights,  and  the  product  of  an  acre  at  ten  hundred  weights,  one 
million  and  a  half  of  acres  would  suffice  for  that  production. 

If  we  take  for  the  other  products,  coffee,  rice,  indigo,  spices, 
etc.,  as  much  space  as  for  the  two  principal,  the  whole  of 
the  colonial  goods  now  in  the  channels  of  trade  would  require  but 
six  or  seven  millions  of  acres,  a  surface  which  is  probably  not 
the  fiftieth  part  of  that  which  is  adapted  to  the  culture  of  those 
staples. 

The  English  in  the  East  Indies,  the  French  in  the  Antilles, 
the  Dutch  in  Java  and  Sumatra,  have  given  us  abundant  proofs 
of  rapid  extension  in  the  culture  of  those  products. 

England  especially  has  quadrupled  her  importation  of  cotton 
from  the  East  Indies,  and  the  English  papers  boldly  affirm 
that  in  a  few  years,  if  she  obtains  possession  of  the  ancient 
route  to  the  East  Indies,  that  region  will  be  able  to  furnish  her 
with  all  of  those  commodities  required  for  her  consumption. 
This  hope  cannot  be  regarded  as  unreasonable,  if  we  consider 
the  immense  extent  of  the  Anglo-Indian  Empire,  the  fertility  of 
its  soil,  and  the  low  price  of  labor  in  that  country. 

At  the  same  time  that  England  will  extract  all  she  can  from 
the  East  Indies,  the  progress  of  Dutch  'culture  in  the  Islands 
will  keep  its  regular  course,  the  dissolution  of  the  Turkish 
Empire  will  restore  to  the  work  of  production  a  large  portion 
of  Africa,  as  well  as  of  Western  and  Central  Asia ;  the  inhabi 
tants  of  Texas  will  carry  the  civilization  of  North  America  over 
the  whole  territory  of  Mexico;  regular  governments  will  be 
established  in  South  America,  and  they  will  favor  the  cultivation 
of  a  soil,  the  fertility  of  which  is  without  bounds. 

By  a  larger  production  than  heretofore  of  their  peculiar 
commodities,  tropical  countries  will  acquire  the  means  of  pur 
chasing  from  countries  of  the  temperate  zone  larger  quantities 
of  manufactured  goods,  and  this  enlargement  of  their  markets 

*  About  2,500,000  bales,  of  400  Ibs.  each. 


MANUFACTURING    INDUSTRY.  349 

will  enable  the  latter  to  consume  greater  quantities  of  tropical 
products.  Under  favor  of  this  development  of  production  and  this 
increase  of  the  means  of  exchange,  the  trade  between  the  culti 
vator  of  the  tropical  regions  and  the  manufacturer  of  temperate 
climes,  that  is,  the  international  trade  of  the  world,  will  increase 
hereafter  with  a  rapidity  greatly  exceeding  that  of  the  last 
century. 

This  mighty  movement  in  the  international  commerce  of  the 
world,  as  it  is  even  now  seen,  and  as  we  may  hope  to  see  it  in 
course  of  time,  must  be  referred  to  several  causes :  to  the 
remarkable  progress  of  manufacturing  industry,  to  the  improve 
ment  of  the  means  of  communication,  by  water  and  by  land, 
and  to  important  events  in  the  political  world. 

By  machinery  and  by  the  progress  of  invention  in  the  West 
the  imperfect  manufactures  of  the  East  have  been  annihilated 
to  the  great  benefit  of  manufacturing  industry  in  Europe ;  the 
latter  has  been  enabled  to  furnish  tropical  countries  with  a  large 
quantity  of  products  manufactured  and  offered  at  such  low 
prices  as  to  supply  abundant  motives  for  the  development  of 
their  productive  power. 

By  the  improvement  of  routes  of  transportation,  tropical 
countries  have  been  brought  much  nearer  to  those  of  the  tempe 
rate  zone;  their  intercourse  has  become  less  dangerous  and 
more  rapid,  less  expensive  and  mo-re  regular ;  they  may  still  be 
incalculably  improved,  when  steam  navigation  shall  become  more 
general,  and  when  railroads  shall  have  invaded  even  the  interior 
of  Asia,  Africa,  and  South  America. 

By  the  separation  of  South  America  from  Spain  and  Portugal, 
and  by  the  virtual  dissolution  of  the  Turkish  Empire,  a  vast  extent 
of  land  has  fallen  into  the  common  domain.  Those  countries,  the 
most  fertile  in  the  world,  are  waiting  impatiently  for  the  kind 
guidance  of  civilized  people  into  paths  of  order  and  security, 
of  civilization  and  prosperity.  They  need  first  to  be  supplied 
with  manufactured  articles  offered  them  in  exchange  for  the 
products  of  their  climes. 

Thus  we  see  for  the  manufacturing  nations  of  Europe  and  for 
the  United  States,  a  field  amply  extensive  for  a  large  and  pros- 


350  THEORY. 

perous  development  of  manufactures,  for  an  increased  consump 
tion  of  tropical  products,  and  for  proportional  development  of 
direct  relations  with  the  tropical  countries. 


CHAPTER  XII. 

MANUFACTURING  INDUSTRY,  NAVAL  AND  MERCANTILE 
MARINE,  AND  COLONIZATION. 

MANUFACTURES  based  upon  an  extensive  internal  and  external 
commerce,  are  also  the  essential  condition  of  a  considerable 
merchant  marine.  Internal  trade  having  especially  for  its 
object  the  supply  of  manufacturers  with  fuel,  building  materials 
and  food,  coast  and  river  navigation,  cannot  prosper  in  a  purely 
agricultural  State.  The  coasting  trade  is  a  nursery  of  seamen 
and  navigators,  and  a  school  for  naval  construction ;  the  chief 
elements  of  a  great  merchant  marine  are  wanting  in  agricultural 
countries. 

As  shown  in  a  preceding  chapter,  the  international  trade 
chiefly  consists  in  the  exchange  of  manufactured  goods  for  raw 
materials  and  products  of  nature,  and  especially  for  tropical 
products.  But  agricultural  countries  of  the  temperate  climes  can 
offer  to  those  of  the  torrid  zone  little  which  they  do  not  already 
enjoy,  or  which  they  cannot  produce,  that  is,  of  raw  materials 
or  food;  hence,  there  can  be  no  direct  relations,  and  conse 
quently  no  commerce  by  sea,  between  them  and  the  latter  coun 
tries.  Their  consumption  of  tropical  commodities  must  be 
restricted  to  the  quantity  they  can  purchase  with  their  agricul 
tural  products  and  raw  materials  from  manufacturing  and 
trading  nations  ;  their  goods  are  thus  obtained  at  second-hand. 
But  in  the  relations  between  an  agricultural  and  a  manufacturing 
commercial  nation  the  latter  will  always  enjoy  the  greatest  por 
tion  of  the  maritime  transportation,  even  if  it  had  not  the 
opportunity  of  seizing  for  itself  the  lion's  share  by  the  way  of 
commercial  regulations  or  acts  of  navigation. 


MANUFACTURING    INDUSTRY.  351 

Independently  of  domestic  trade  and  international  commerce, 
maritime  fisheries  employ  a  vast  number  of  ships  $>  but^enei^ally 
agricultural  nations  remain  almost  strangers  ;ie  th^brailcH  of 
industry,  for  the  reason  that  a  heavy  demand 'f^r  marMnie  Tpro- 
ducts  cannot  arise  in  them,  and  that  manufacturing  ^©^fl'ics, 
with  a  view  to  the  interests  of  their  shipping,  reserVj^feir^own 
market  for  their  own  fisheries. 

It  is  in  the  mercantile  marine  that  fleets  find  their  seamen 
and  pilots ;  and  experience  has  ever  taught,  that  skilful  seamen 
are  not  formed  like  soldiers  —  that  their  training  must  be  upon 
the  sea-coasts,  in  distant  navigation,  or  in  large  fisheries.  Naval 
power  is  therefore,  in  all  nations,  on  a  level  with  their  maritime 
industry,  and  is  consequently  almost  nothing  in  a  purely  agri 
cultural  country. 

The  crowning  success  of  manufacturing  industry,  of  internal 
and  external  trade,  of  an  active  coasting  trade,  of  distant  navi 
gation,  and  great  maritime  fisheries  —  in  a  word,  of  a  respectable 
naval  power,  lies  in  the  possession  of  colonies. 

The  mother  country  supplies  her  colonies  with  manufactured 
goods,  and  receives  in  exchange  the  surplus  of  the  latter  in 
agricultural  products  and  raw  materials.  This  trade  animates 
her  manufactures,  increases  her  population,  as  well  as  the 
demand  for  products  of  her  own  agriculture,  and  develops  her  ship 
ping  interests  and  naval  power.  Its  surplus  population  and 
capital,  its  spirit  of  enterprise,  finds  in  colonization  an  advan 
tageous  outlet,  and  it  is  largely  indemnified  for  what  it  parts 
with.  A  considerable  number  of  those  who  grow  rich  in  colo 
nies  carry  back  their  wealth  to  their  parent  country,  or  at  least 
they  spend  their  income  in  it. 

Agricultural  nations  are  not  only  unable  to  found  colonies, 
but  they  can  neither  derive  advantage  from  them,  nor  keep 
them.  They  cannot  offer  to  colonies  the  products  which  they 
want ;  the  latter  already  possess  what  the  former  can  spare. 

The  exchange  of  manufactured  articles  for  the  products 
of  the  soil,  is  an  essential  condition  of  the  present  colonial 
trade.  The  United  States  of  North  America  separated  from 
England  as  soon  as  they  felt  the  necessity,  and  were  conscious 


352  THEORY. 

of  the  power,  of  becoming  manufacturers,  of  building  up  a  com 
mercial  marine,  and  entering  upon  a  commerce  with  tropical 
countries ;  Canada  will  do  the  same,  when  a  similar  degree  of 
development  has  been  reached.  Thus,  too,  in  course  of  time,  we 
shall  see  agricultural,  manufacturing  and  commercial  states 
rising  in  the  temperate  climes  of  Australia. 

But,  between  countries  of  the  temperate  and  those  of  the 
torrid  zone,  this  exchange  will  be  perpetual,  for  it  accords  with 
nature.  This  is  the  reason  why  the  East  Indies  have  been 
deprived  by  England  of  their  manufacturing  industry,  and  their 
independence;  and  all  the  warm  regions  of  Asia  and  Africa 
must  fall  by  degrees  beneath  the  dominion  of  the  manufacturing 
and  commercial  nations  of  the  temperate  zone ;  this  is  the  reason, 
also,  why  the  islands  of  the  torrid  zone  will  find  it  hard  to  break 
their  colonial  bonds,  and  the  States  of  South  America  must 
always  remain  in  a  certain  degree  of  dependence  upon  manu 
facturing  and  trading  nations. 

England  is  indebted  for  her  immense  colonial  empire,  to  the 
overpowering  influence  of  her  manufactures ;  if  other  European 
nations  desire  to  participate  in  the  advantageous  work  of  intro 
ducing  civilization  into  savage  countries,  of  civilizing  barba 
rians,  of  restoring  those  people  who,  from  being  civilized  men, 
have  sunk  to  the  condition  of  barbarians,  they  must  com 
mence  developing  their  manufacturing  industry,  their  mercantile 
marine,  and  their  naval  power.  If  they  find  their  efforts 
obstructed  by  a  nation  assuming  supremacy  in  manufactures, 
commerce,  and  shipping,  they  can  only  resort  to  an  alliance 
among  themselves  to  destroy  or  nullify  such  unwarrantable 
pretensions. 


MANUFACTURING  INDUSTRY.        353 


CHAPTER  XIII. 

MANUFACTURING  INDUSTRY,  AND  THE  INSTRUMENTS 
OF  CIRCULATION. 

IF  the  experience  of  the  last  quarter  of  a  century  has  in  part 
proved  the  exactness  of  the  principles  professed  by  the  ruling 
theory,  in  opposition  to  the  doctrines  of  what  is  called  the  mer 
cantile  system,  touching  the  circulation  of  the  precious  metals  and 
the  balance  of  trade,  it  has  on  the  other  hand  brought  to  light 
grave  errors  in  the  theory  itself. 

Experience  has  more  than  once  shown,  especially  in  Russia  and 
North  America,  that  in  agricultural  nations  where  manufactures 
encounter  the  unchecked  competition  of  a  country  which  has 
already  attained  to  manufacturing  supremacy,  the  value  of 
manufactured  goods  imported  often  exceeds,  in  an  enormous 
proportion,  that  of  the  exported  agricultural  products ;  the 
result  of  which  is  sometimes  a  sudden  and  extraordinary  shipment 
of  the  precious  metals,  causing  disturbance  in  the  economy  of 
the  nation,  especially  in  its  internal  transactions,  if  they  are 
based  mainly  upon  a  circulation  of  bills,  and  becoming  the 
occasion  of  great  commercial  calamities. 

Theorists  maintain  that  the  precious  metals  are  obtained  in 
the  same  way  as  other  merchandise ;  that  it  is,  in  fact,  of  little 
importance  whether  the  quantity  of  these  metals  in  circulation 
be  great  or  small,  since  the  relative  movement  of  prices  is  that 
which  determines  the  dearness  or  the  cheapness  of  merchandise ; 
that  a  difference,  in  the  course  of  exchange,  operates  as  a  pre 
mium  to  exportation,  for  the  benefit  of  the  country  which  for  the 
time  has  incurred  an  unfavorable  exchange;  that  accordingly 
the  circulation  of  money  and  the  equilibrium  between  imports 
and  exports,  as  well  as  other  economical  relations  of  the  country, 
could  not  be  more  surely  and  advantageously  regulated  than  by 
the  nature  of  things. 

This  reasoning  is  perfectly  correct  in  regard  to  internal  trade  ; 
it  is  applicable  to  relations  between  two  cities,  between  city  and 
23 


354  THEORY. 

country,  between  two  provinces  of  the  same  state,  and  two  states 
belonging  to  the  same  union.  The  economist  who  should  think 
thac  the  equilibrium  of  imports  and  exports  between  the  different 
States  of  the  American  Union,  or  those  between  the  States  of 
the  German  Confederation,  or  between  England,  Scotland,  and 
Ireland,  could  be  better  regulated  by  measures  of  government 
and  laws  than  by  free  trade,  would  be  worthy  of  compassion. 
In  the  hypothesis  of  an  union  among  all  the  nations  of  the 
world,  the  positions  above  stated  would  be  perfectly  conforma 
ble  with  the  nature  of  things.  But  to  admit  them,  in  the  present 
state  of  the  world  and  its  international  trade,  would  be  directly 
to  contradict  experience. 

The  imports  and  exports  of  independent  nations  are  not  at 
present  regulated  by  what  in  theory  is  called  the  nature  of 
things  ;  they  depend  mostly  on  commercial  policy  and  the  power 
v  of  a  country,  on  its  importance  in  the  world,  its  influence  over 
foreign  nations,  its  colonial  possessions  and  institutions  of  credit, 
finally,  on  peace  and  war.  There  are  consequently  relations 
altogether  different  from  those  which  could  exist  among  nations 
united  in  bonds  political,  legal,  and  administrative,  in  a  state 
of  perpetual  peace  and  perfect  unity  of  interests. 

Let  us  consider,  for  example,  the  relations  between  England 
.yand  the  United  States;  if  occasionally  England  pours  a  large 
quantity  of  manufactured  goods  into  the  market  of  the  United 
States ;  if  the  Bank  of  England,  by  its  high  or  low  rate  of  dis 
counts,  facilitates  or  restrains  to  an  extraordinary  degree  credit 
and  exports  for  that  country ;  if  the  American  market  is  thus  in 
undated  with  British  goods  to  such  a  degree  that  they  are  sold  in 
the  United  States  at  lower  rates  than  in  England,  and  at  times 
even  below  the  cost  of  production ;  if  the  United  States  are  thus 
constantly  indebted  to  England  with  an  unfavorable  exchange, 
it  is  certain  that  this  unhappy  condition  of  trade  would  find  an 
easy  remedy  in  the  operation  of  absolute  free  trade.  North 
America  produces  tobacco,  timber,  corn,  and  food  of  every  kind 
at  a  price  vastly  lower  than  England.  The  more  manufactured 
goods  England  exports  to  the  United  States,  the  more  the 
American  planter  is  stimulated  to  the  production  of  equivalent 


MANUFACTURING    INDUSTRY.  355 

values ;  the  more  credit  he  enjoys,  the  more  is  he  disposed  to 
secure  the  means  of  meeting  his  engagements ;  the  more  exchange 
in  England  is  adverse  to  the  United  States,  the  more  exports  of 
agricultural  products  from  that  country  are  encouraged,  and  the 
more  successfully  can  the  agriculturists  of  the  United  States 
compete  with  those  of  England. 

Under  favor  of  exports  thus  increased,  the  course  of  exchange 
would  soon  resume  its  level;  it  would  even  no  longer  exhibit 
any  appreciable  inequality,  because  it  would  be  foreseen  with 
certainty  in  the  United  States,  that  the  debt  contracted  in  the 
course  of  one  year  in  consequence  of  increased  imports  of  manu 
factured  goods  would  be  covered  and  paid  during  the  next  year 
by  increased  production  and  larger  exports,  eifecting  thus  a 
complete  adjustment.  This  would  be  the  order  of  events,  if 
relations  between  English  manufacturers  and  American  agri 
culturists  encountered  no  greater  obstacles  than  exist  between 
the  same  English  manufacturers  and  the  agriculturists  of  Ire 
land.  But  it  is  not  and  cannot  be  so  whilst  England  imposes 
upon  American  tobacco  a  duty  from  500  to  1000  per  cent,  of  its 
value,  whilst  by  her  tariff  she  prohibits  the  importation  of  tim-  ^ 
ber  and  admits  American  grain  only  in  seasons  of  scarcity.  In 
this  state  of  things  the  agricultural  production  of  America  cannot 
be  brought  into  equilibrium  with  the  consumption  of  English 
manufactured  goods  ;  the  debt  incurred  in  the  purchase  of  these  - 
goods  cannot  be  paid  with  agricultural  products.  The  exports 
of  the  United  States  to  England  are  confined  to  very  narrow 
limits,  whilst  those  of  England  to  North  America  meet  no  obsta 
cle  ;  the  course  of  exchange  between  the  two  countries  cannot, 
therefore,  be  brought  to  par,  and  the  debt  of  the  United  States 
to  England  can  only  be  paid  in  the  precious  metals. 

These  exports  of  money  removing  the  very  basis  of  the  bank 
ing  system,  involves  the  discredit  of  American  banks,  and  con 
sequently  a  general  revolution  in  the  value  of  property  and  in 
the  commodities  moving  in  the  channels  of  trade ;  in  a  word, 
those  disorganizing  fluctuations  of  prices  and  of  credit,  which 
have  afflicted  the  United  States  whenever  they  fail  to  adopt 
measures  to  keep  their  imports  and  their  exports  in  equilibrium. 


356  THEORY. 

The  fact  that  bankruptcy  and  the  diminution  of  consumption 
soon  or  late  bring  the  exchange  between  the  two  countries  to  a 
tolerable  condition,  is  but  sad  consolation  for  the  people  of  the 
United  States ;  for  disturbances,  revulsions  in  commerce,  and 
credit,  and  the  injury  inflicted  by  reduced  consumption  upon 
productive  power,  upon  the  welfare  of  individuals,  and  upon 
public  order,  are  evils  admitting  of  but  slow  remedies,  and  the 
disastrous  consequences  of  which  must,  if  frequently  encountered, 
be  necessarily  durable. 

The  people  of  the  United  States  will  be  no  better  pleased  or 
satisfied  with  the  doctrine  of  the  theorists,  because  it  is  of  little 
import  whether  the  precious  metals  circulate  in  larger  or  less 
quantities ;  because  products  are  in  fact  only  exchangeable  for 
products ;  and  because  it  is  immaterial  for  individuals  whether 
this  exchange  be  effected  with  more  or  less  use  of  money.  It 
imports  little,  undoubtedly,  to  the  producer  or  the  proprietor  of 
a  commodity,  whether  his  property  be  worth  100  cents  or  100 
francs,  if  with  the  100  cents  he  can  procure  as  many  commodi 
ties  as  with  the  100  francs.  But  high  or  low  prices  are  of  less 
consequence  than  whether  prices  are  regular  and  permanent. 

If  fluctuations  of  prices  are  frequent  and  great,  much  de 
rangement  in  the  business  of  individuals,  as  well  as  in  the 
economy  of  society,  must  ensue.  He  who  purchases  raw  mate 
rials  at  high  prices,  cannot  be  reimbursed  for  his  outlay  by  sale 
of  his  manufactured  products  when  prices  are  low.  He  who 
purchases  land,  without  paying  the  whole  of  the  purchase-money, 
becomes  insolvent,  and  loses  both  land  and  money ;  for,  by  the 
fall  of  prices,  the  value  of  the  estate  may  not  cover  the  amount 
of  the  mortgage.  He  who  rents  land  is  ruined  by  the  reduction 
of  prices,  or  becomes  unable  to  meet  his  obligations.  The  wider 
the  range  of  such  extremes  in  prices,  and  the  more  frequently  these 
fluctuations  occur,  the  more  unfavorably  is  the  economical  con 
dition  of  the  country,  and  particularly  its  credit,  affected.  No 
where  are  the  disastrous  effects  of  an  extraordinary  influx  or 
export  of  the  precious  metals  exhibited  more  plainly,  than  in 
countries  which  depend  for  their  supply  of  manufactured  goods 
and  the  sale  of  their  agricultural  products,  entirely  upon  foreign 


MANUFACTURING    INDUSTRY.  357 

markets,  and  in  which  trade  is  mainly  based  upon  a  circulation 
of  paper. 

It  is  known  that  the  quantity  of  bank-notes  which  can  be 
circulated  in  a  country  is  regulated  by  the  quantity  of  specie  it 
possesses.  Banks  extend  or  limit  their  circulation  of  notes  and 
their  operations,  in  proportion  to  the  quantity  of  precious  metals 
in  their  vaults.  If  abundantly  provided  with  specie  of  their 
own  or  upon  deposit,  liberal  credits  are  given,  and  those  who 
are  debtors  already  are  permitted  to  increase  their  debts  ;  hence 
an  increase  in  consumption,  and  a  rise  of  prices,  especially  in 
the  value  of  land.  If,  on  the  contrary,  banks  find  their  supply 
of  specie  gradually  departing,  they  must  not  only  withhold  new 
credits,  but  reduce  the  amounts  already  granted,  the  effect  of 
which  must  be  to  reduce  the  consumption  of  the  debtors  of  the 
banks,  and  also  the  consumption  of  all  who  have  relations  with 
these  debtors.  In  such  countries,  an  extraordinary  export  of 
specie  has  consequently  the  result  of  disturbing  the  whole  system 
of  credit ;  the  trade  in  every  kind  of  merchandise ;  and  espe 
cially  the  money  value  of  real  estate. 

The  cause  of  the  last  American  commercial  crisis,  as  well  as 
of  those  preceding,  has  been  sought  in  the  organization  of  the 
banks  and  the  circulation  of  notes.  The  truth  is,  the  banks 
had  their  part  in  it,  as  may  appear  from  the  preceding  remarks ; 
but  the  grand  cause  of  that  crisis  was,  that  since  the  adoption 
of  the  compromise  act,  the  value  of  the  manufactured  goods 
imported  from  England  had  greatly  exceeded  that  of  the  agri 
cultural  products  exported  from  America ;  and  that  the  United 
States  had  thus  become  debtor  to  England  for  several  hundreds 
of  millions,  which  they  had  not  been  able  to  pay  with  their  pro 
ducts.  What  proves  that  these  revulsions  must  be  attributed  to 
disproportionate  importations  is,  that  they  constantly  occurred 
when  the  return  of  peace  or  a  reduction  of  duties  induced  an 
over-importation  of  manufactured  goods ;  and  that  they  never 
occurred  when  the  duties  were  high  enough  to  keep  the  importa 
tion  of  manufactures  in  equilibrium  with  the  exportation  of 
agricultural  products. 

Some  have  attempted  to  explain  these  revulsions  by  the  large 


358  THEORY. 

amounts  of  capital  employed  in  North  America  in  the  construc 
tion  of  canals  and  railroads,  capital  chiefly  borrowed  from  Great 
Britain.  The  truth  is,  however,  that  these  loans  only  helped  to 
postpone  for  a  few  years  a  crisis,  and  to  aggravate  it ;  the  loans 
were  themselves  caused  hy  the  want  of  equilibrium  between  im 
ports  and  exports ;  and,  without  that  circumstance,  they  neither 
would  nor  could  ever  have  been  contracted. 

The  United  States  becoming  heavily  indebted  to  England  in 
consequence  of  a  large  importation  of  manufactured  goods,  the 
debt  not  being  payable  in  agricultural  products,  could  only  be 
paid  in  the  precious  metals,  or  by  the  acceptance  of  the  amount 
in  American  railroad,  canal,  bank,  or  public  stocks,  in  which 
the  English  had  much  the  advantage,  as  the  exchange  was 
greatly  in  their  favor. 

The  more  the  importation  of  manufactured  goods  exceeded 
the  exportation  of  agricultural  products,  and  the  livelier  the 
demand  for  American  stocks  in  England,  the  more  the  people 
of  the  United  States  were  encouraged  to  undertake  public  works. 
On  the  other  hand,  in  proportion  as  the  capital  embarked  in 
these  undertakings  was  larger  in  the  United  States  of  America, 
the  greater  was  the  demand  for  English  manufactured  goods, 
and  at  the  same  time  the  disproportion  between  importation  and 
exportation  was  increased. 

If  on  the  one  hand  the  importation  of  manufactured  goods 
from  England  into  the  United  States,  was  stimulated  by  the 
liberal  discounts  of  American  banks,  on  the  other  the  bank  of 
England  contributed  to  the  same  result  by  liberal  credits  and 
low  rates  of  discount.  It  appears  from  an  official  report  of  a 
committee  on  commerce  and  manufactures  in  England,  that  the 
bank,  by  its  discounts  in  one  instance,  in  a  short  time  reduced 
its  cash  balance  from  eight  to  two  millions  sterling.  By  this  it 
diminished  for  the  benefit  of  English  manufacturers  the  efficacy 
of  the  American  protective  system :  at  the  same  time  it  facili 
tated  and  encouraged  the  purchase  in  England  of  shares  and 
public  stocks  from  the  United  States.  For,  so  long  as  money 
is  at  three  per  cent,  interest  in  England,  and  American  bonds 


MANUFACTURING    INDUSTRY.  359 

or  stocks  bear  six  or  seven  per  cent.,  men  will  be  found  ready 
to  invest  their  money  at  this  advanced  rate. 

The  state  of  things  which  caused  the  successive  fall  of  Ame 
rican  manufacturers,  presented,  however,  the  appearance  of  a 
great  prosperity.  For  the  agriculturists  of  the  United  States 
found  among  the  laborers  employed  upon  the  public  works,  and 
paid  with  English  capital,  a  market  for  a  large  portion  of  their 
products,  which,  under  the  operation  of  free  trade,  would  have 
been  sent  to  England;  or  which,  under  a  protective  system,  . 
suited  to  the  fabrics  of  the  country,  would  have  been  sold  to 
the  manufacturing  population.  But,  under  a  separation  of 
national  interests,  relations  so  unnatural  could  not  last,  and  the 
rupture  was  fatal  to  North  America,  in  proportion  as  it  had 
been  deferred.  It  was  the  case  of  a  debtor  whom  his  creditor 
may  sustain  longer  by  the  aid  of  extended  credits,  but  whose 
bankruptcy  is  only  more  fatal,  because  he  has  been  permitted 
by  his  creditor  to  continue  longer  his  disastrous  operations. 

The  failure  of  American  banks  was  brought  about  by  an  ex 
traordinary  export  of  precious  metals  from  England  to  other 
countries,  which  was  caused  by  the  insufficiency  of  harvests,  and 
by  the  protective  system  of  the  continent ;  for  if  the  European 
markets  had  been  open  to  the  English,  they  would  have  paid  for 
their  extraordinary  purchases  of  corn  mainly  by  extraordinary 
exportations  of  manufactured  products,  which,  if  sold  upon  the 
continent,  would  soon  have  brought  back  the  precious  metals  to 
England.  No  doubt  the  continental  manufacturers  would  then 
have  paid  by  their  ruin  the  expense  of  the-  commercial  opera 
tions  between  England  and  the  United  States. 

But  in  the  existing  state  of  things  the  Bank  of  England  could 
only  extricate  itself  by  limiting  its  credits  and  raising  its  rate 
of  discount.  The  object  of  these  measures  was  not  only  to 
put  an  end  in  England  to  the  demand  for  American  bonds  and 
stocks,  but  also  to  force  upon  the  market  such  as  were  in  private 
hands.  The  United  States  were  thus  deprived  of  the  advantage 
of  meeting  their  current  deficit  by  the  emission  of  new  debt ; 
and  payment  of  the  entire  indebtedness  to  England  contracted 
during  several  years  of  over-trading,  and  by  the  transfer  of 


360  THEORY. 

bonds,  shares  and  stocks,  was  all  at  once  demanded.  It  was 
then  clearly  seen  that  the  specie  circulating  in  America  was  the 
property  of  England.  It  was  moreover  seen  that  England  could 
dispose,  at  her  pleasure,  of  that  specie,  upon  which  rested  the 
whole  banking  and  credit  system  of  the  American  Union,  and 
that  if  she  should  so  dispose  of  it,  the  whole  edifice  would 
tumble  into  ruins,  like  a  castle  of  cards,  and  with  it  the  value 
of  estates  in  land,  and  consequently,  the  whole  fortunes  of  a 
vast  number  of  individuals. 

The  American  banks  tried  to  break  their  fall  and  save  the  coun 
try  and  themselves,  by  suspending  specie  payments ;  it  was,  in  fact, 
the  only  alleviation  in  their  power.  On  the  one  hand,  they 
wished  to  gain  time  in  which  the  debt  of  the  United  States 
might  be  diminished  by  the  proceeds  of  a  new  crop  of  cotton, 
etc.,  and  to  pay  gradually  in  this  manner ;  on  the  other  hand, 
they  hoped,  by  the  interruption  of  credits,  to  lessen  the  importa 
tion  of  manufactured  goods  from  England,  and  to  reduce  it  for 
the  future  to  an  equilibrium  with  the  exports. 

It  is  very  doubtful  whether  the  exportation  of  raw  cotton  can 
ever  furnish  the  means  of  liquidating  the  importation  of  manu 
factured  goods.  For  more  than  twenty  years,  in  fact,  the  pro 
duction  of  that  article  has  constantly  and  greatly  exceeded  the 
consumption,  so  that  the  price  has  been  constantly  declining. 
Add  to  this  that  the  manufacture  of  cotton  has  found  a  powerful 
competition  in  that  of  linen,  recently  so  highly  improved  by 
the  aid  of  machinery,  and  that  the  culture  of  cotton  has  greatly 
enlarged  its  area  in  the  plantations  of  Texas,  Egypt,  Brazil, 
and  the  East  Indies.*  However  that  may  be,  it  must  be  re 
marked  that  the  exportation  of  cotton  is  of  very  little  advan 
tage  to  those  States  of  the  American  Union  which  consume  the 
most  of  the  manufactured  goods  imported  from  England. 

*  The  quantity  of  cotton  imported  by  England  in  the  financial  year  of 
1854,  was  as  follows  :— 

Cwt.  Bales. 

From  the  United  States 5,879,006  ....  1,763,000 

"  "  Eastlndies ................  1,619,058 485,616 

"  "  All  other  places ^ 492,255  ....  147,676 

Reduced  into  bales  of  360  Ibs. 


MANUFACTURING    INDUSTRY.  361 

In  those  States  especially  in  which  the  culture  of  corn  and 
the  breeding  of  cattle  furnish  the  means  of  purchasing  manu 
factured  goods,  a  crisis  of  another  kind  is  now  impending.  The 
American  manufacturers  have  succumbed  beneath  the  heavy 
importation  of  English  manufactured  goods.  The  surplus  of 
population  and  capital  has  thus  been  diverted  from  this  channel 
and  turned  towards  the  west.  Each  new  plantation  augments 
at  first  the  demand  for  agricultural  products,  but  after  a  few 
years  furnishes  itself  a  considerable  surplus.  This  has  been 
exemplified  for  many  years,  and  continues  to  be  the  history  of 
that  country.  The  time  is  coming,  then,  when  the  Western 
States  will  forward  by  canals  and  railroads  now  in  progress  of 
construction,  an  enormous  quantity  of  commodities  to  the 
markets  of  the  Eastern  States,  where  manufactories,  having 
been  obstructed  if  not  overwhelmed  by  foreign  competition,  the 
number  of  consumers  is  diminished  and  continues  to  diminish. 
Hence,  a  depreciation  of  agricultural  products  and  of  land, 
must,  to  some  extent,  ensue,  and  if  the  Union  does  not  adopt 
preventive  measures  against  the  monetary  revulsions  which  so 
often  desolate  the  country,  as  we  have  above  indicated,  serious 
if  not  fatal  injury  must  often  befall  the  agriculturists  of  the 
grain-growing  States. 

This  exposition  of  the  commercial  relations  between  England 
and  the  United  States  teaches : — 

1st.  That  a  country  greatly  inferior  to  England  in  capital  and 
manufactures  cannot  receive  without  limitation  her  manufactures 
but  upon  condition  of  becoming  her  permanent  debtor,  depend 
ent  upon  her  institutions  of  credit,  and  involved  in  the  vortex 
of  her  agricultural,'  manufacturing,  and  commercial  revulsions. 

2d.  That  the  Bank  of  England  has  been  conducted  with 
a  view  to  the  advantage  of  English  manufacturers,  and  to 
the  detriment  of  American  manufacturers,  and  has  thus  aided 
in  placing  English  manufactured  articles  at  the  lowest  possible 
rates  in  the  markets  of  the  United  States. 

3d.  That  owing  to  the  facilities  thus  offered  to  English  manu 
facturers  and  American  importers,  the  people  of  the  United 
States  have  for  many  years  consumed  more  imported  goods, 


362  THEORY. 

more  values  than  they  could  pay  for  in  agricultural  products, 
and  for  which  payment  could  only  be  made  by  exporting  stocks 
and  public  securities. 

4th.  That  in  such  circumstances  the  Americans  have  employed 
An   their  banking  business  and  in  their  circulation   the  specie 
S  which  the  Bank  of  England  could,  for  the  chief  part,  withdraw 
at  its  pleasure. 

5th.  That  fluctuations  in  the  money  market  exercise  in  every 
state  of  things  a  disastrous  influence  upon  the  economy  of 
nations,  but  especially  where  an  extensive  circulation  of  paper 
is  based  upon  a  limited  quantity  of  the  precious  metals. 

6th.  That  such  fluctuations  and  the  revulsions  produced 
by  them  cannot  be  prevented,  and  a  solid  system  of  credit 
established,  without  an  equilibrium  between  the  exports  and 
imports. 

7th.  That  such  an  equilibrium  is  established  with  the  more 
difficulty  if  manufactured  products  from  abroad  are  admitted  to 
compete  freely  with  those  of  the  country,  and  if  exports  of  the 
agricultural  products  of  the  country  are  restrained  by  foreign 
tariffs,  and  finally  this  equilibrium  will  be  less  disturbed  in  pro 
portion  as  the  country  depends  less  on  foreign  parts  for  manu 
factured  articles  and  a  market  for  the  products  of  its  soil. 

These  lessons  are  confirmed  by  the  experience  of  Russia. 

The  revulsions  of  public  credit  in  the  Russian  Empire,  so  long 
as  the  market  of  that  country  remained  open  to  inundations  of 
English  manufactured  goods,  are  in  the  recollection  of  many 
persons  ;  nothing  like  them  has  occurred  since  the  establishment 
of  the  Russian  tariff  of  1821. 

It  is  obvious  that  the  reigning  theory  has  fallen  into  the 
opposite  extreme  of  what  is  called  the  mercantile  system.  It 
was  undoubtedly  wrong  in  that  system  to  assume  that  the  wealth 
J  of  nations  must  consist  in  the  precious  metals,  that  a  nation 
could  become  rich  by  exporting  more  goods  than  it  imported, 
so  as  to  produce  a  balance  to  be  exacted  in  the  precious  metals. 
But  the  ruling  theory  errs  also  in  maintaining  that  in  the  present 
state  of  the  world  the  amount  of  coin  circulating  in  a  country  is 
a  matter  of  no  importance ;  that  the  fear  of  having  too  little  is 


MANUFACTURING    INDUSTRY.  363 

frivolous,  and  that  the  import  of  specie  should  rather  be  dis 
couraged  than  its  import  encouraged.  This  indifference  to  the 
possession  of  the  precious  metals  could  only  be  just  if  the  nations 
of  the  world  were  united  in  one  grand  confederation ;  if  there  / 
existed  no  restrictions  of  any  kind  to  prevent  payment  for 
manufactured  goods  in  agricultural  products  ;  if  the  vicissitudes 
of  war  and  peace  no  longer  occasioned  fluctuations  in  production, 
consumption,  and  in  prices ;  if  large  establishments  of  credit  / 
sought  not  to  extend  their  influence  over  nations  for  the  special 
advantage  of  the  nation  to  which  they  belong.  .  But  so  long  as 
separate  nationalities  exist,  prudence  enjoins  upon  the  great 
States  that  commercial  policy  which  will  save  them  from  monetary 
revulsions  and  such  fluctuations  in  prices  as  derange  their  whole  v 
internal  economy ;  and  that  end  can  only  be  attained  by  vigor 
ously  maintaining  the  equilibrium  between  manufacturing 
industry  and  agriculture,  and  between  imports  and  exports. 

It  is  manifest  that  the  ruling  theory  has  not  distinguished  in 
international  commerce,  between  the  possession  of  the  precious 
metals  and  the  power  of  disposing  of  them.  The  necessity  of 
this  distinction  appears  at  once,  in  private  intercourse.  No  one 
wishes  to  keep  his  money.  Every  one  seeks  for  some  mode  of 
parting  with  it :  but  every  one  is  also  desirous  and  exerts  him 
self  to  have  at  all  times  a  sum  of  which  he  can  dispose  at  plea 
sure.  The  indifference  to  the  possession  of  specie  is  generally 
proportioned  to  the  degree  of  opulence.  The  richer  an  indivi 
dual,  the  less  he  needs  the  actual  possession  of  specie.  He  only 
desires  to  have  the  disposal  of  that  which  may  be  in  the  vaults 
of  others.  The  poorer  a  man  is,  on  the  contrary,  and  the  less 
he  is  able  to  dispose  of  money  in  the  hands  of  others,  the  more 
need  he  has  of  reserving  a  sum  for  his  own  use.  It  is  the  same 
with  an  industrious  people,  and  with  a  people  without  industry. 
If,  in  general,  England  cares  little  about  the  quantity  of  gold 
and  silver  bullion  which  she  exports,  she  knows  very  well  that 
an  extraordinary  export  of  precious  metals  is  followed  on  the 
one  hand  by  an  enhancement  of  their  value,  as  well  as  of  the 
rate  of  discount ;  on  the  other,  by  a  decline  in  the  price  of 
manufactured  goods  and  an  increased  export  of  goods,  or  by  the 


364  THE  OUT. 

realization  of  foreign  stocks  or  public  funds,  which  rapidly  re 
stores  the  specie  to  the  regular  channels  of  trade.  England  is 
like  a  rich  hanker,  who,  without  a  shilling  in  his  pocket,  can 
draw  upon  his  correspondents,  far  and  near,  for  any  sum  he 
requires.  But,  when  an  extraordinary  export  of  money  takes 
place  among  nations  purely  agricultural,  the  condition  of  the 
latter  is  far  from  being  so  favorable ;  the  means  which  they  have 
of  procuring  the  specie  they  need,  are  limited  not  only  by  the  small 
exchangeable  value  of  their  agricultural  products,  but  also  by 
the  obstacles  which  foreign  tariffs  oppose  to  the  exportation  of 
their  commodities.  They  are  like  the  poor  man,  who  has  no 
correspondents  upon  whom  he  can  draw,  but  who,  on  the  con 
trary,  is  drawn  upon  when  the  rich  are  in  need,  and  who,  con 
sequently,  has  no  resource  in  time  of  difficulty,  but  that  which 
is  in  his  hands.  This  power  of  commanding  the  amount  of 
money  needful  for  its  internal  commerce  is  obtained  chiefly  by 
the  production  of  merchandizes  and  values,  the  exchangeable 
power  of  which  approaches  nearest  to  that  of  the  precious  metals. 

The  different  degree  of  exchangeable  power  in  the  different 
commodities  has  been  overlooked  by  the  School  in  its  study  of 
international  commerce,  quite  as  much  as  a  disposable  power 
over  the  precious  metals.  If  we  examine  in  this  respect  the 
different  values  found  in  the  channels  of  trade,  we  notice  that  a 
large  number  are  of  such  a  nature  as  not  to  be  saleable,  except 
in  the  market,  and  that  their  sale  is  expensive  as  well  as  difficult. 
These  comprehend  more  than  three-fourths  of  the  wealth  of  a 
nation,  such  as  real  estate,  mortgages,  &c.  However  considera 
ble  may  be  the  landed  estate  of  an  individual,  he  can  send 
neither  his  fields  nor  his  meadows  to  the  city  to  purchase  specie 
or  goods.  He  can,  of  course,  mortgage  his  estates,  but  he  must 
find  a  lender ;  and  the  farther  he  goes  from  his  property,  the 
less  chance  has  he  of  meeting  what  he  seeks. 

No  commodities  of  trade  have  so  little  exchangeable  power  as 
agricultural  products,  except  the  values  set  upon  localities,  and 
except  colonial  goods  and  a  small  number  of  high-priced  articles. 
The  greatest  part  of  these  values,  such  as  building  materials, 
fruit,  grain,  fuel,  and  cattle,  find  no  market  but  in  their  own 


MANUFACTURING    INDUSTRY.  365 

vicinity ;  and,  when  superabundant,  must  be  stored  for  future 
sale  or  use.  When  such  articles  go  to  foreign  countries,  their 
market  is  confined  to  certain  manufacturing  and  mercantile  na 
tions  ;  and  even  among  the  latter  they  are  very  often  subject  to 
duties,  and  dependent  upon  tariffs  and  upon  the  result  of  crops 
in  those  countries.  The  interior  of  the  United  States  super- 
abounds  in  cattle  and  food,  but  no  considerable  amount  of  the 
precious  metals  could  be  obtained  from  South  America,  England, 
or  the  continent  of  Europe,  by  exporting  the  surplus  of  these 
productions. 

Manufactured  products  in  general  use  have  a  vastly  greater 
power  of  exchange.  They  are  constantly  sold  in  all  open  mar 
kets,  even  in  times  of  pressure  when  prices  are  falling,  and 
where  the  protective  duties  imposed  are  as  high  as  in  prosperous 
times.  These  commodities  come  evidently  nearest  to  the  exchange 
able  power  of  the  precious  metals ;  and  the  experience  of  Eng 
land  proves  that  when  monetary  revulsions  proceed  from  deficient 
crops,  an  increased  export  of  manufactured  goods,  of  stocks, 
and  public  funds,  promptly  re-establishes  the  equilibrium.  The 
possession  of  these  stock  securities  is  of  itself  the  result  of 
favorable  balances  caused  by  the  sale  of  manufactured  goods, 
and  their  sale,  in  case  of  necessity,  furnishes  ample  means  of 
restoring  the  equilibrium  of  payments,  lost  by  over-importation. 

However  the  School  may  have  scouted  the  doctrine  of  the 
balance  of  trade,  the  preceding  remarks  lead  us  to  make  the 
assertion  that,  among  great  and  independent  nations,  there  is  a 
balance  of  trade,  which  it  is  dangerous  to  overlook  for  any  con 
siderable  time,  and  which  cannot  be  neglected  without  decided 
disadvantage ;  and  that  a  considerable  and  continuous  export 
of  the  precious  metals  will  cause  serious  disturbance  in  the 
credit  system  and  market  prices  of  any  country.  We  would 
not  revive  the  doctrine  of  the  balance  of  trade,  as  understood 
in  what  was  called  the  mercantile  system,  nor  contend  that  na 
tions  should  prohibit  the  export  of  the  precious  metals,  nor 
insist  that  they  must  keep  a  rigid  account  with  each  country ; 
nor  that  in  the  trade  between  great  nations  a  pause  should 
occur  upon  the  difference  of  a  few  millions  between  the  imports 


THEORY. 

and  exports.  What  we  here  deny  is  only  this,  that  a  great 
independent  nation  can,  as  Smith  maintains  in  the  chapter  upon 
this  subject,  every  year  import  a  greater  value  in  products  of 
the  soil  and  manufactures  than  the  value  of  its  exports ;  can  see 
a  yearly  diminution  of  its  precious  metals,  the  vacuum  thus 
made  in  the  circulation  being  filled  with  bank-notes ;  that  it  can 
contract  to  another  nation  an  ever-increasing  debt,  and  yet  con 
tinue  to  prosper. 

It  is  only  this  position  assumed  by  Adam  Smith,  and  repro 
duced  by  his  School,  that  we  declare  to  be  contradicted,  a  hun 
dred  times,  by  experience,  and  to  be  contrary  to  the  well-settled 
course  of  trade,  and,  using  Adam  Smith's  own  energetic  expres 
sion,  to  be,  in  one  word,  an  absurdity. 

Of  course,  we  do  not  speak  here  of  countries  producing,  with 
profit,  the  precious  metals,  and  in  which,  consequently,  the 
exportation  of  bullion  has  in  fact  the  character  of  an  export 
of  manufactured  goods.  Neither  do  we  speak  of  that  difference 
in  the  commercial  balance  which  must  necessarily  occur  when 
the  value  of  goods,  both  imported  and  exported,  is  estimated 
according  to  the  prices  of  its  maritime  cities.  In  this  case, 
it  is  obvious  that  its  imports  must  exceed  its  exports  by  the 
whole  amount  of  the  profits  of  trade;  this  circumstance  is 
entirely  to  its  advantage.  And  still  less  shall  we  deny,  that 
in  extraordinary  cases  an  excess  of  exports  denotes  rather  loss 
than  gain;  for  instance,  when  commodities  have  perished  by 
shipwreck.  The  School  has  skilfully  derived  advantage  from  all 
these  illusions  —  the  result  of  narrow  views  —  denying  even  the 
inconvenience  of  an  effective,  continued,  persevering,  enormous 
disproportion  between  the  imports  and  the  exports  of  a  great 
country,  of  a  disproportion  as  great  as  that  which  existed  in 
France  from  1786  to  1789 ;  in  Russia,  from  1820  to  1821 ;  and 
in  North  America,  after  the  Compromise  Act. 

Finally,  and  it  is  important  to  mark  this,  we  do  not  speak  of 
colonies  nor  of  countries  not  independent,  nor  of  small  states 
and  isolated  free  cities,  but  of  complete,  great,  independent 
nations,  possessing  a  system  of  commerce  of  their  own,  a 


MANUFACTURING    INDUSTRY.  367 

f 

national,  agricultural  and  manufacturing  system,  with  a  national 
system  of  circulation  and  credit. 

It  is  evidently  in  the  nature  of  colonies,  that  their  exports 
greatly  and  constantly  exceed  their  imports ;  from  which,  how 
ever,  no  conclusion  can  he  drawn  as  to  the  increase  or  diminution 
of  their  prosperity.  Colonies  prosper  in  proportion  to  the  yearly 
increase  of  both  exports  and  imports.  If  the  export  of  tropical 
commodities  perceptibly  and  constantly  exceeds  the  return  in 
manufactured  goods,  the  chief  apparent  reason  is  that  many 
of  the  colonial  proprietors  reside  in  the  parent  country,  and 
receive  their  income  in  the  form  of  colonial  goods  or  in  the  pro 
ceeds  of  their  sale.  If,  on  the  contrary,  the  importation  of 
manufactured  articles  is  much  greater,  the  reason  may  chiefly 
be  that  emigration  and  loans  yearly  carry  to  the  colony  a  large 
amount  of  capital.  This  state  of  things  is  extremely  favorable 
to  colonial  prosperity.  It  may  last  for  centuries,  and  while  it 
continues,  commercial  revulsions  will  be  rare,  if  not  impossible ; 
because  colonies  are  seldom  injured  by  war  or  by  hostile  com 
mercial  policy,  or  by  the  operations  of  a  metropolitan  bank; 
and  instead  of  having  their  own  independent  system  of  com 
merce,  credit  and  industry,  they  are  protected  and  upheld  by 
the  institutions  of  credit  and  by  the  laws  of  the  parent  country. 

Such  relations  existed  beneficially  for  a  long  period  between 
North  America  and  England ;  they  exist  still  between  England 
and  Canada,  and  they  may  last  for  a  considerable  time  between 
England  and  Australia. 

They  alter  essentially,  however,  from  the  day  when  the  colony 
is  emancipated,  and  claims  the  attributes  of  a  great  and  inde 
pendent  nation,  a  policy  of  its  own,  and  a  distinct  system  of 
commerce  and  credit.  What  was  before  a  colony,  now  makes 
laws  to  aid  the  development  of  its  merchant  and  naval  marine ; 
it  protects  its  industry  by  a  system  of  duties ;  it  founds  a  national 
bank.  At  least,  a  policy  of  this  kind  may  be  expected  if  the 
nation  which  has  thus  broken  the  colonial  bonds  is  awake  to  the 
importance  of  promoting  and  completing  its  naval,  physical  and 
economical  resources,  of  becoming  a  manufacturing  and  com 
mercial  country.  The  parent  country,  after  such  separation 


308  THEORY. 

from  her  former  possession,  treats  it  as  a  stranger,  restricts 
its  navigation,  commerce  and  industry,  and  employs  her  own 
institutions  of  credit  for  her  own  benefit. 

Now,  it  was  precisely  by  the  example  of  these  colonies  of 
North  America,  before  the  war  of  independence,  that  Adam 
Smith  expected  to  prove  the  paradox  above  mentioned,  that  a 
country  may  augment  its  exports  of  gold  and  silver,  restrict  its 
circulation  of  the  precious  metals,  extend  its  circulation  of  bank 
notes,  increase  its  debt  to  other  nations,  and  yet  go  on  and 
prosper.  Adam  Smith  takes  good  care  not  to  refer  to  the  case 
of  two  nations  wholly  independent  of  each  other,  rivals  in  navi 
gation  and  commerce,  and  in  manufacturing  industry  and  agri 
culture  ;  in  support  of  his  opinion  he  prefers  to  rest  upon  the 
relations  of  colonies  with  the  mother  country.  If  he  had  lived 
to  our  time,  and  had  written  his  work  in  our  day,  he  would  have 
been  equally  careful  not  to  refer  to  the  case  of  the  United 
States,  the  commerce  of  which  shows  precisely  the  reverse  of 
his  doctrine. 

Since  it  is  so,  however,  can  it  be  urged  that  it  would  be  much 
more  advantageous  for  the  United  States  to  return  to  the  con 
dition  of  English  colonies?  To  that  we  answer,  certainly,  if 
the  United  States  is  not  wise  enough  to  take  advantage  of  her 
emancipation,  and  to  establish  a  national  industry,  with  a  proper 
and  independent  system  of  commerce  and  credit.  For  it  is  easy 
to  see,  that  if  those  colonies  had  never  been  severed  from  England, 
the  corn-laws  would  never  have  been  enacted,  England  would 
never  have  imposed  such  exorbitant  duties  upon  American  tobacco, 
and  an  immense  quantity  of  timber  would  have  been  exported 
yearly  from  the  United  States ;  England,  far  from  encouraging 
the  production  of  cotton  elsewhere,  would  have  exerted  herself 
to  reserve  for  North  America  the  monopoly  of  this  article  ;  com 
mercial  revulsions  like  those  which  have  so  deeply  troubled 
North  America  for  many  years  would  not  have  occurred.  Cer 
tainly,  if  the  United  States  wish  not  to  havre,  or  cannot  have 
manufactures,  nor  to  establish  a  durable  system  of  credit,  nor 
to  possess  a  navy,  then  it  is  in  vain  that  the  people  of  Boston 
gave  the  first  impulse  to  the  ball  of  the  Revolution,  and  Ameri- 


MANUFACTURING    INDUSTRY.  369 

cans  have  declaimed  in  vain  about  their  independence  and  the 
future  grandeur  of  their  country ;  and  their  best  policy  is  to 
return  as  soon  as  possible  to  dependence  upon  England.  Then, 
instead  of  checking,  England  would  protect  them,  and  ruin 
their  competitors  in  the  culture  of  cotton  and  grain,  instead 
of  raising  new  rivals.  The  Bank  of  England  would  establish 
branches  in  North  America,  the  English  government  would 
favor  emigration,  and  the  employment  of  capital  in  the  United 
States.  On  the  one  hand,  by  annihilating  American  manu 
factures,  and  on  the  other  hand,  by  encouraging  the  importation 
of  American  raw  materials  into  England,  she  would  strive  with 
maternal  care  to  prevent  the  return  of  commercial  revulsions, 
and  to  maintain  consequently  the  due  equilibrium  between  the 
imports  and  the  exports  of  the  colony.  In  a  word,  the  planters 
of  cotton  would  then  have  realized  that  policy  which  in  their 
dreams  appears  so  beautiful. 

For  a  long  time,  in  fact,  such  a  prospect  appeared  to  suit  the 
taste,  the  patriotism,  the  business,  and  the  wants  of  those 
planters  better  than  the  independence  and  the  grandeur  of  the 
United  States.  It  was  only  in  the  first  exaltation  of  liberty  and 
political  emancipation  that  they  dreamed  of  an  industrial  inde 
pendence.  But  their  zeal  for  industrial  independence  quickly 
subsided,  and  during  the  last  quarter  of  a  century  the  prosperity 
of  manufacturers  in  the  Middle  and  Eastern  States  annoys  them ; 
they  have  undertaken  to  prove  in  Congress  that  American 
prosperity  depends  on  the  industrial  domination  of  England  over 
the  United  States.  What  less  can  all  this  mean  than  that  North 
America  would  be  richer  and  happier  by  becoming  again  an 
English  colony  ? 

It  seems  to  us  that  the  partisans  of  free  trade,  so  far  as 
regards  monetary  revulsions,  the  balance  of  trade  and  manufac 
turing  industry,  would  be  more  consistent  with  themselves  if 
they  should  frankly  advise  all  nations  to  submit  to  England  and 
thus  obtain  the  advantages  attached  to  the  condition  of  English 
colonies.  Such  a  state  of  subjection  would  be  obviously  much 
more  favorable  to  material  interests  than  the  false  position 
of  those  nations  which,  without  having  their  own  system  of 
24 


370  THEORY. 

industry,  commerce,  and  credit,  affect,  notwithstanding,  still  to  be 
independent  of  England.  How  much  better  for  Portugal,  if 
since  the  treaty  of  Methuen  she  had  been  governed  by  an  English 
Viceroy  —  if  England  had  introduced  there  her  laws  and  her 
national  spirit,  and  had  taken  that  country  under  her  protection, 
as  she  has  taken  the  East  Indies !  How  much  more  beneficial 
would  such  a  government  have  been  for  Germany  and  the  whole 
continent  of  Europe ! 

The  manufacturing  industry  of  India  has  been  destroyed,  it 
is  true ;  but  has  not  the  agriculture  of  India  profited  immensely 
by  the  export  of  agricultural  products  ?  Have  not  the  wars  of 
the  Nabobs  come  to  an  end  ?  Are  not  her  princes  and  kings 
happy  ?  Have  they  not  kept  their  large  incomes  ?  Are  they 
not  entirely  freed  from  the  laborious  cares  of  government  ? 

It  is,  moreover,  worthy  of  remark  that  familiar  as  these  con 
tradictions  are  to  those  who,  like  Adam  Smith,  deal  in  paradoxes, 
this  celebrated  writer,  after  all  his  argument  against  the  exist 
ence  of  a  commercial  balance,  admits  what  he  calls  the  balance 
between  the  consumption  and  the  production  of  a  country,  but 
which,  being  closely  examined,  is  simply  neither  more  nor  less 
than  our  real  and  effective  balance  of  trade.  When  the  exports 
of  a  country  are  in  proper  equilibrium  with  its  imports,  it  will 
not  consume  to  any  extent  more  than  it  produces ;  whilst  the 
country  which,  during  a  long  period,  as  in  the  recent  case  of 
the  United  States,  imports  foreign  manufactured  commodities  to 
a  much  greater  value  than  it  exports  agricultural  products,  is 
almost  certain  to  consume  a  greater  value  in  foreign  goods  than 
it  can  produce  in  products  of  the  soil.  Is  this  not  what  is  shown 
by  the  crisis  in  France  from  1786  to  1789,  in  Russia  from  1820 
to  1821,  and  in  the  United  States  after  1833  ? 

In  terminating  this  chapter,  we  shall  indulge  ourselves  in  pro 
posing  a  few  questions  to  those  who  class  with  antiquated  fables 
the  whole  doctrine  of  the  balance  of  trade. 

Why  has  a  visible  and  constantly  unfavorable  balance  always 
been  followed  in  every  country  where  it  has  occurred,  except 
colonies,  by  commercial  revulsions,  disturbance  in  prices, 
financial  embarrassments,  and  the  general  failure  of  banks  or 


MANUFACTURING    INDUSTRY.  371 

institutions  of  credit,  of  tradesmen,  manufacturers,  and  agricul 
turists  ? 

Why  do  countries  with  a  balance  decidedly  favorable  always 
present  phenomena  so  different,  and  why  do  commercial  revul 
sions,  when  they  occur  among  those  with  whom  they  are  in 
relations  of  business,  react  upon  them  with  so  little  effect  or 
injury. 

As  Russia  now  produces  the  larger  portion  of  the  manufac 
tured  goods  she  consumes,  why  is  the  balance  of  trade  decidedly 
and  constantly  in  her  favor  ?  How  is  it,  since  the  change  in  her 
industrial  policy,  that  nothing  more  is  heard  of  commercial  revul 
sions,  and  that  the  prosperity  of  that  empire  has  increased  yearly  ? 

How  is  it  that  in  the  United  States  the  same  causes,  favor 
able  and  unfavorable,  have  always  produced  the  same  effects  ? 

Why,  when  the  Compromise  Act  had  induced  heavy  importa 
tions  of  foreign  manufactured  goods  into  the  United  States,  did 
the  balance  of  trade  there  become  during  a  series  of  years  so 
remarkably  unfavorable,  and  why  such  unhappy  revulsions  and 
such  protracted  derangements  of  their  internal  economy  ?  Why 
at  this  moment  are  the  United  States  so  encumbered  with  raw 
materials  of  every  kind,  cotton,  tobacco,  cattle,  and  grain,  that 
prices  have  fallen  one-half  ?  and  why  are  they,  notwithstanding, 
unable  to  restore  the  equilibrium  between  imports  and  exports, 
to  extinguish  their  debt  to  England,  and  to  reinstate,  upon  a 
solid  basis,  their  system  of  credit  ? 

If  there  be  no  balance  of  trade,  or  if  it  matters  little  whether 
it  be  favorable  or  unfavorable,  if  it  be  indifferent  whether  the 
precious  metals  are  exported  in  large  or  small  quantities,  why 
does  England,  upon  the  occurrence  of  a  deficient  harvest,  the 
only  occasion  when  she  apprehends  an  unfavorable  balance, 
watch  with  inquietude  and  anxiety  the  state  of  the  exports  and 
imports  ?  How  comes  it  that  she  then  counts  each  ounce  of 
gold  and  silver  imported  or  exported,  and  that  the  Bank  is 
actively  engaged  in  preventing  the  departure  of  the  precious 
metals  and  in  favoring  their  return  ?  If  the  balance  of  com 
merce  be  an  exploded  fallacy,  why,  we  ask,  is  there  not  at  such 


372  THEORY. 

times  a  single  English  paper  in  which  the  export  of  gold  is  not 
treated  as  of  the  most  serious  consequence  to  the  country  ?  * 

How  comes  it  that  in  the  United  States  the  same  people  who 
denounced  the  balance  of  trade  as  an  exploded  fallacy  before 
the  Compromise  Act,  have  since  then  never  ceased  to  regard  it 
as  of  the  most  serious  consequence  to  that  country  ? 

*  It  requires  no  very  prolonged  inquiry  by  a  judicious  and  unprejudiced 
mind,  to  ascertain  that  the  modern  School  exaggerates  the  importance  of 
commerce  as  much  as  the  old  advocates  of  the  mercantile  theory.  They 
regard  the  subject  from  a  different  point  of  light ;  their  theories  are  dif 
ferent  ;  but  commerce,  foreign  commerce,  is  the  grand  topic  of  both.  The 
old  School  looked  to  commerce  as  the  chief  source  of  wealth ;  the  new 
School  regards  commerce  as  the  grand  regulator  of  industry,  and  free 
trade  as  the  summit  of  economical  policy.  It  would  be  hard  to  decide 
which  of  these  errors  is  greatest.  There  can  be  no  doubt  that  the  old 
policy  is  the  safest  for  a  nation,  and  it  is  undoubtedly  that  which  England 
has  strictly  observed  in  all  her  progress.  England  pursued  the  mercantile 
system,  as  is  generally  known,  until  a  very  recent  date  ;  that  is,  her  whole 
industrial  policy,  external  and  internal,  was  directed  mainly  to  the  increase 
of  her  foreign  trade.  Within  a  few  years  England  has  greatly  modified 
her  commercial  system ;  and  this  the  modern  School  claims  to  have  been 
an  adoption  of  the  principle  of  free  trade.  Far  from  it,  in  fact,  though  it 
suits  England  to  have  it  so  regarded.  England  protected  her  home  indus 
try,  and  by  this  means  increased  her  foreign  trade  to  the  utmost  extent 
practicable  in  that  way.  When  it  became  no  longer  possible  to  increase 
her  exports  by  that  policy,  England  reduced  her  duties,  and  enlarged  her 
free  list,  for  the  express  and  avowed  purpose  of  increasing  her  foreign 
trade.  She  did  not  resort  to  this  expedient  until  her  home  industry  could 
bear  this  exposure,  and  safely  encounter  the  competition  of  the  world. 
England  still  clings  to  tha-  advantage  of  a  favorable  balance  of  trade,  and 
holds  in  special  dread  those  circumstances  which  tend  to  create  or  threaten 
an  unfavorable  balance.  No  fact  is  better  known  than  this.  It  is  known 
that  a  short  crop  of  grain  is  spoken  of  in  England  far  more  on  account  of 
its  effect  on  the  balance  of  trade,  than  because  the  people  may  suffer  for 
want  of  bread.  England  cannot  be  induced  to  adopt  any  principle  of  free 
trade  which  will  tend  to  produce  an  unfavorable  balance  in  her  national 
commerce.  She  now  admits  corn  free,  because,  when  it  was  needed,  it 
would  be  imported  at  any  rate ;  so  with  the  raw  material  of  her  manufac 
tures,  they  must  be  imported,  and  a  reduction  of  cost  to  the  manufacturer 
increases  his  exports.  England  may  adopt  a  free  trade  measure,  nay, 
many  such,  but  they  will  be  found  to  be  adopted,  not  for  the  sake  of  free 
trade  as  a  theory,  but  with  the  view  of  favoring  industry,  and  by  that 
means  increasing  foreign  trade.  —  [S.  C.] 


MANUFACTURING    INDUSTRY.  373 

Why,  finally,  if  the  nature  of  things  constantly  supplies  to 
every  country  the  quantity  of  the  precious  metals  it  requires, 
does  the  Bank  of  England  endeavor  systematically  to  control 
the  nature  of  things  by  the  management  of  credits  and  dis 
counts,  with  a  view  to  increase  the  stock  of  gold  ?  and  why  have 
the  American  banks  been  compelled  at  times  to  suspend  their 
payments  in  specie  until  the  restoration  of  the  necessary  equi 
librium  between  the  exports  and  imports  ?  * 


CHAPTER  XIV. 

MANUFACTURING  INDUSTRY  AND  THE  PRINCIPLE   OF  PER 
MANENCY  AND  PROGRESS. 

IN  considering  the  origin  and  progress  of  manufactures,  we 
find  that  success  has  only  been  reached  by  slow  degrees ;  for 
improved  processes,  machinery,  buildings,  experience,  skill,  and 
the  needful  arrangements  for  the  prompt  delivery  of  raw  mate 
rials  and  a  favorable  market  for  manufactured  products,  are 
only  attainable  by  degrees  and  by  the  lapse  of  much  time.  We 
readily  comprehend  that,  as  a  general  rule,  it  is  vastly  more  easy 
to  perfect  and  to  enlarge  an  enterprise  already  begun,  than  to 

*  It  is  one  of  Adam  Smith's  and  J.  B.  Say's  titles  to  repute  that  they 
brought  to  light  the  illusions  of  the  balance  of  commerce ;  illusions  which 
we  might  fully  have  supposed  would  have  been  dissipated  by  this  time, 
but  which  are  frequently  reproduced  in  our  public  assemblies  and  deli 
berative  bodies.  The  partizans  of  protective  duties,  however,  no  longer 
produce  them  as  arguments.  It  is  true,  nevertheless,  that  there  is  between 
imports  and  exports  an  equilibrium  which,  if  disregarded,  must  cause  se 
rious  commercial  evils;  it  is  plain  that  a  nation  which,  from  want  of 
activity,  or  from  apathy,  or  from  any  other  cause,  cannot  pay  with  its  own 
products  for  those  which  it  imports,  is  going  to  ruin.  Upon  this  subject 
List  happily  rectifies  that  which  his'  predecessors,  preoccupied  with  com 
bating  the  accredited  errors  of  the  system  and  the  time,  had  failed  to 
accomplish.  As  to  the  delicate  questions  which  pertain  to  the  precious 
metals  and  the  banks,  regarded  in  their  relations  with  international  com 
merce,  he  is  far  from  having  exhausted  them.  —  [H.  R.] 


374  T  H  E  0  K  Y . 

commence  a  new  one.  It  may  be  always  observed  that  old  indus 
tries,  carried  on  for  many  generations,  are  pursued  with  more 
advantage  than  others.  We  find  that  it  is  more  difficult  to 
move  a  new  enterprise  when  there  have  been  few,  if  any,  similar 
undertakings  in  the  country ;  for  on  new  enterprises  managers 
and  workmen  have  to  be  trained  or  brought  from  abroad,  and 
the  knowledge  of  results  is  not  yet  sufficient  to  inspire  capi 
talists  with  that  degree  of  confidence  needful  to  secure  their  co 
operation.  On  comparing  the  condition  of  industries  in  the 
same  country  at  various  periods,  we  discover  that  unless  special 
causes  of  disturbance  have  intervened,  they  have  always  made 
great  progress  from  generation  to  generation,  not  only  in  reduc 
tion  of  price,  but  also  in  respect  of  quantity  and  quality  of 
products.  We  notice,  on  the  other  hand,  that  under  the  influ 
ence  of  disturbing  causes,  such  as  war  and  devastation,  or  op 
pressive  measures  of  despotism  or  fanaticism,  such,  for  instance, 
as  the  revocation  of  the  Edict  of  Nantes,  people  have  always 
retrograded  many  centuries  in  their  general  industry,  as  well  as 
in  particular  branches,  and  have  thus  been  outstripped  by  na 
tions  of  which  they  had  previously  been  greatly  in  advance. 

It  is  quite  obvious,  in  a  word,  that  in  production,  as  well  as  in 
other  efforts  of  man,  great  branches  of  industry  are  subject  to 
a  natural  law  very  much  like  that  of  the  division  of  labor  and 
the  association  of  productive  power,  and  which  consists  in  this, 
that  several  succeeding  generations,  so  to  speak,  combine  their 
power  to  attain  one  and  the  same  end,  and  divide,  as  it  were, 
the  efforts  it  exacts. 

It  is  in  virtue  of  this  principle,  that  hereditary  monarchy  has 
been  without  comparison  more  favorable  to  the  maintenance  and 
the  consolidation  of  nationalities,  than  elective  monarchies,  with 
their  characteristic  instability. 

It  is  partly  due  to  this  natural  law,  that  nations  in  the  enjoy 
ment  of  a  good  constitutional  government  succeed  better  than 
others  in  industry,  commerce  and  navigation.  This  law  explains 
also,  in  some  respects,  the  influence  of  alphabetical  writing  and 
of  the  press,  on  the  progress  of  mankind.  By  alphabetical 
writing,  the  inheritance  of  knowledge  and  experience  is  trans- 


MANUFACTURING    INDUSTRY.  875 

mitted  from  generation  to  generation  with  much  more  fidelity 
than  by  oral  tradition. 

The  knowledge  of  this  natural  law  is  doubtless  one  of  the 
causes  of  the  establishment  of  castes  among  the  ancient  nations, 
and  of  that  Egyptian  institution  according  to  which  the  son  was 
bound  to  exercise  the  same  industry  as  his  father ;  before  the 
invention  and  the  general  use  of  writing,  such  institutions  must 
have  been  regarded  as  indispensable  for  the  preservation  and 
progress  of  the  arts  and  trades. 

Manufacturing  corporations  also,  in  part,  owe  their  origin  to 
the  same  cause. 

It  is  chiefly  to  the  sacerdotal  castes  of  ancient  times,  to 
monasteries  and  universities,  that  we  are  indebted  for  the  pre 
servation  and  improvement  of  the  fine  arts  and  the  sciences,  as 
well  as  for  their  transmission  from  one  generation  to  another. 

To  what  power  and  influence  did  not  the  religious  orders, 
orders  of  knighthood,  and  of  the  Holy  See,  attain  by  obeying 
this  law,  during  a  period  of  centuries  ?  each  generation  taking 
up  the  work  where  its  predecessor  had  left  it  off. 

The  importance  of  this  principle  appears  still  more  evident 
in  special  undertakings.  Cities,  monasteries,  and  corporations 
have  erected  monuments  or  structures  of  greater  cost  than  all 
the  estates  of  the  builders  are  worth  at  the  present  day.  A 
whole  series  of  generations  reserved  and  applied  its  savings  to  a 
single  great  object. 

The  system  of  canals  and  dikes  in  Holland  is  the  result  of  the 
exertions  and  the  savings  of  many  generations.  It  requires  a 
succession  of  generations  in  any  country  to  establish  a  complete 
system  of  fortification  and  defence. 

Public  credit  is  one  of  the  most  beautiful  creations  of  modern 
administration ;  and  it  is  a  blessing  for  the  people  when  it  serves 
to  distribute  among  several  generations  the  cost  of  the  public 
works  and  undertakings  of  the  present  generation,  important  as 
they  are  to  the  whole  future  of  the  nation,  assuring  its  existence, 
development,  grandeur,  and  the  increase  of  its  productive  power. 
Public  credit  is  a  curse  when  employed  for  useless  consumption, 
and  when,  so  far  from  aiding  the  progress  of  future  generations, 


376  THEORY. 

it  absorbs  in  advance  the  means  of  great  undertakings,  or  when 
the  weight  of  the  interest  of  the  national  debt  falls  on  the  con 
sumption  of  laborious  classes,  instead  of  affecting  the  income 
of  the  rich. 

The  debts  of  the  State  are  bills  of  exchange,  which  the  pre 
sent  draws  upon  a  future  generation.  They  may  have  been 
contracted  for  the  particular  interest  of  the  present  or  for  that 
of  the  future,  or  for  the  common  benefit  of  both.  In  the  first 
case  only  are  they  to  be  condemned.  But  whenever  the  pre 
servation  and  development  of  the  nation  are  in  question,  and  the 
necessary  expenditure  for  that  purpose  exceeds  the  resources  of 
the  present  generation,  the  debt  falls  into  the  latter  category. 

No  expenditure  of  the  present  age  is  of  more  advantage  to 
future  generations  than  that  for  improving  the  routes  of  travel 
and  transportation;  the  more  especially,  as  in  general  those 
works,  besides  increasing  to  an  extraordinary  degree,  and  in  an 
ever-augmenting  progression,  the  productive  power  of  future 
generations,  pay  off  in  the  course  of  time  the  capital  employed 
in  them,  and  then  yield  a  revenue.  Thus,  it  is  not  only  allow 
able  for  the  present  generation  to  impose  upon  their  posterity 
the  expense  of  such  works,  including  the  interest  of  the  capital 
used  in  their  construction,  until  they  yield  a  sufficient  revenue, 
but  it  is  unjust  to  itself  and  violates  the  true  principles  of  political 
economy  when  it  assumes  the  whole  burden  or  even  a  considerable 
portion  of  it. 

Reverting  to  the  great  industries  with  which  we  are  now  occu 
pied,  it  is  obvious  that  continuity  of  labor  is  of  great  importance 
in  agriculture,  and  happily  less  liable  to  interruption  than  in 
manufacturing  industry,  its  interruptions  being  also  much  less 
injurious,  and  the  damage  they  cause  being  more  promptly  and 
easily  repaired. 

However  serious  the  disturbances  encountered  by  agriculture, 
its  peculiar  wants,  its  products,  so  indispensable  to  civilized  life, 
the  general  diffusion  of  agricultural  knowledge,  the  low  grades 
of  capacity  it  requires,  the  simplicity  of  its  processes  and  its 
instruments,  prevent  it  from  being  entirely  destroyed. 

As  soon  as  the  ravages  of  war  have  ceased,  its  labors  are  re- 


MANUFACTURING  INDUSTRY.         377 

sumed,  neither  the  enemy  nor  the  foreign  competition  is  able  to 
carry  off  the  principal  instrument  of  agriculture,  which  is  the 
soil ;  and  indeed  nothing  less  than  the  oppression  of  a  series  of 
generations  can  convert  fertile  fields  into  a  desert,  or  deprive 
the  inhabitants  of  a  country  of  the  means  of  cultivating  it. 

On  the  contrary,  the  slightest  and  shortest  interruption  para 
lyzes  manufacturing  industry  ;  that  which  is  prolonged  destroys 
it.  If  a  manufacture  requires  skill,  dexterity  and  capital,  if 
large  sums  are  invested  in  it,  interruption  is  the  more  disastrous. 
Machinery  and  implements  become  of  no  more  value  than  old 
iron  and  wood,  the  buildings  tumble  into  ruins,  the  workmen  are 
dispersed,  making  efforts  to  earn  their  living  in  other  pursuits. 
Thus  is  destroyed,  in  a  short  time,  a  combination  of  powers  and 
materials  which  were  only  assembled  and  made  effective  by  the 
labors  of  many  years  or  generations. 

During  the  growth  and  prosperity  of  manufactures,  one 
industry  invites,  encourages,  and  sustains  another  until  it 
flourishes ;  in  the  time  of  interruption  and  decline,  the  ruin  of 
one  industry  is  the  signal  for  the  ruin  of  many  others,  and 
finally,  for  the  destruction  of  the  essential  elements  of  manu 
facturing  power. 

It  is  the  sentiment  of  the  immense  advantage  of  continuity 
of  labor,  and  of  the  irreparable  injury  caused  by  interruption, 
which  obtained  a  favorable  reception  for  the  idea  of  protecting 
manufactures  by  duties,  and  not  the  clamors  and  the  selfish  de 
mands  of  manufacturers  greedy  of  exclusive  privileges. 

When  such  protection  fails  of  its  object,  where,  for  instance, 
manufactures  suffer  for  want  of  a  market  abroad,  and  when  the 
government  is  unable  to  furnish  any  aid  and  protection,  we 
often  see  manufacturers  working  at  a  loss,  in  expectation  of 
better  times,  thus  endeavoring  to  escape  the  irreparable  injury 
of  interrupted  labor. 

Under  the  reign  of  free  competition  it  occurs  not  unfrequently 
that  manufacturers,  in  the  hope  of  driving  rivals  to  a  ces 
sation  of  their  operations,  sell  their  products  below  the  current 
rates,  and  even  at  an  actual  loss.  They  strive  not  only  to  save 
themselves  from  interruption,  but  by  a  present  loss  to  inflict 


378  THEORY. 

it  upon  others,  expecting  to  be  indemnified  afterwards,  when 
they  have  more  exclusive  possession  of  the  market. 

Tendency  to  monopoly  is,  it  is  true,  in  the  nature  of  manu 
facturing  industry.  But  that  is  an  argument  for  and  not  against 
the  protective  system ;  for  within  the  limits  of  the  domestic 
market  this  tendency  has  the  effect  of  reducing  prices  and  the 
development  of  industry  as  well  as  of  national  prosperity,  whilst 
if  a  reduction  of  prices  comes  from  abroad  with  a  power  which 
cannot  be  resisted,  it  involves  the  interruption  of  industry  and 
the  downfall  of  the  manufactures  of  the  country. 

The  fact  that  manufacturing  production,  aided  as  it  is 
specially  and  powerfully  by  machinery,  knows  no  other  limits 
than  the  necessary  capital  and  ready  sale  for  its  products, 
enables  a  nation  which  has  obtained  advantages  by  a  century  of 
continuous  or  uninterrupted  labor,  by  the  accumulation  of  an 
immense  capital,  by  a  vast  commerce,  by  financial  domination 
through  the  agency  of  great  institutions  of  credit,  which  operate 
to  reduce  the  price  of  manufactured  goods,  and  to  stimulate 
manufacturers  to  exportation — enables,  we  repeat,  such  a  nation 
to  carry  on  against  the  manufacturers  of  all  other  nations  a  war 
of  extermination.  Against  such  opposition  it  is  wholly  impossi 
ble  that  extensive  manufactures  can  be  established  by  other 
nations,  either  in  consequence  of  their  progress  in  agriculture, 
or,  to  use  the  expression  of  Adam  Smith,  according  to  the  natu 
ral  course  of  things :  neither  is  it  possible  for  manufactures  fos 
tered  by  the  interruption  of  commerce  or  established  in  time  of 
war,  though  coming  into  life  in  the  natural  course  of  things,  to 
sustain  themselves  in  the  face  of  such  competition. 

They  may  be  compared  to  a  youth,  struggling  with  a  full-grown 
man  —  aggression  is  impossible,  and  resistance  hopeless.  The 
manufactures  of  the  chief  industrial  and  commercial  power 
possess  a  thousand  advantages  over  those  of  other  nations  just 
coming  into  existence  or  not  arrived  at  full  growth ;  they  have, 
of  course,  skilful  and  experienced  workmen  in  great  numbers 
and  at  low  wages,  men  of  special  skill  and  adaptation  as 
managers,  the  most  perfect  and  cheapest  machines  ;  they  are 
able  to  purchase  and  sell  upon  most  favorable  terms ;  they  have 


MANUFACTURING    INDUSTRY.  379 

the  least  expensive  routes  of  transportation  and  travel  for  the 
delivery  of  raw  materials,  and  for  the  sale  of  manufactured 
products.  They  have  extensive  credit  upon  the  most  favorable 
terms  from  great  financial  institutions ;  the  advantage  of  expe 
rience,  of  superior  implements,  of  ships,  warehouses,  commer 
cial  relations ;  of  numberless  things  which  can  only  be  gathered 
and  organized  in  the  course  of  generations ;  of  an  immense  internal 
market,  and,  what  is  of  equal  account,  an  immense  colonial 
market,  and  consequently  the  certainty  in  any  state  of  things 
of  being  able  to  sell  with  profit  a  vast  quantity  of  goods ;  all 
which  are  guarantees  of  stability  and  sufficient  means  to  await 
better  times,  or  ability  to  find  new  markets. 

If  we  examine,  in  detail,  all  these  advantages,  we  find  that, 
as  against  a  power  possessing  them  it  would  be  vain  to  rely  upon 
the  natural  course  of  things,  where  free  competition  prevailed  and 
workmen  and  artists  were  to  be  trained ;  where  machinery  is  to 
be  constructed  and  routes  of  transportation  are  to  be  perfected  ; 
where,  far  from  sending  a  considerable  quantity  of  goods  to 
foreign  countries,  the  manufacturer  has  not  even  the  possession 
of  his  own  market ;  where  he  thinks  himself  fortunate  to  find 
credit  to  the  extent  of  the  merest  necessaries ;  where  it  is  a  subject 
of  daily  apprehension,  that  under  the  influence  of  commercial 
revulsions  or  the  operations  of  the  Bank  of  England,  a  large 
quantity  of  foreign  goods  may  be  thrown  upon  the  country 
at  prices  hardly  equivalent  to  the  value  of  the  raw  materials, 
thus  checking  for  years  the  progress  of  manufacturing  industry. 

In  vain  would  such  nations  submit  perpetually  to  the  supre 
macy  of  English  manufactures,  and  be  satisfied  with  the  modest 
part  of  furnishing  England  with  whatever  she  cannot  produce 
herself,  or  cannot  procure  elsewhere.  In  this  humiliation  there 
would  be  no  salvation.  What  avails  it,  for  instance,  if  North 
Americans  sacrifice  the  prosperity  of  their  richest  and  most  ad 
vanced  States,  of  their  free  labor,  nay,  perhaps  their  future 
national  grandeur,  to  the  advantage  of  supplying  England  with 
raw  cotton  ?  Will  this  prevent  England  from  procuring  that 
material  in  other  countries  ?  The  Germans  would  in  vain  resign 
themselves  to  receive  from  England,  in  exchange  for  their  fine 


380  THEORY. 

wool,  the  manufactured  goods  which  they  consume.  For,  twenty 
years  hence,  Australia  may  inundate  all  Europe  with  wool  of 
unsurpassed  quality. 

Such  a  subordinate  condition  appears  still  more  deplorable, 
when  we  reflect  that  by  war,  nations  thus  situated  lose  their 
market  for  agricultural  productions,  and  at  the  same  time  the 
power  of  purchasing  their  accustomed  supply  of  foreign  manu 
factures.  Then  every  other  consideration  must  be  laid  aside, 
and  every  economical  system  abandoned ;  it  is  the  moment  for 
self-preservation,  when  that  highest  law  must  prevail  which 
commands  nations  to  betake  themselves  to  their  agricultural 
labors,  and  to  dispense  with  the  manufactured  goods  of  an  in 
dustrial  enemy.  They  hesitate  not  a  moment  at  the  losses  of  the 
prohibitive  or  protective  system,  which  a  state  of  war  involves. 
But  when,  by  great  efforts  and  great  sacrifices,  an  agricultural 
nation  has,  during  a  period  of  war,  brought  her  manufactures 
into  efficiency,  and  the  competition  of  the  chief  manufacturing 
power  returns  with  peace,  it  brings  destruction  upon  this  creation 
of  necessity.  In  a  word,  a  continual  alternation  of  creation 
and  destruction,  prosperity  and  adversity,  must  be  the  fate  of 
those  nations  which  do  not  adopt  and  realize  in  their  own.  be 
half  that  national  division  of  labor  and  association  of  productive 
power  needful  to  secure  the  advantage  of  continuity  in  the  prin 
cipal  departments  of  industry  from  generation  to  generation. 


CHAPTER  XV. 

MANUFACTURING  INDUSTRY,  AND  STIMULANTS  TO  PRODUC 
TION  AND  CONSUMPTION. 

IN  society,  to  produce  is  not  only  to  bring  forth  products, 
properly  so  called,  but  productive  power ;  it  is  not  only  to  excite  to 
production  and  to  consumption,  but  to  the  creation  of  productive 
power. 

The  artist  exerts  by  his  works  an  ennobling  influence  upon 
the  human  mind,  and  upon  the  productive  power  of  society ; 


MANUFACTURING    INDUSTRY.  381 

moreover,  the  enjoyment  of  arts  supposes  the  possession  of  ma 
terial  objects,  wherewith  to  pay  for  the  productions  of  art ;  the 
fine  arts  stimulate  that  industry  and  economy  which  furnish  the 
means  of  purchasing  works  of  art. 

Books  and  journals  exert,  by  the  knowledge  they  diffuse,  an 
influence  on  material  and  intellectual  production ;  but  to  acquire 
them  costs  money,  and  the  pleasure  they  procure  is  thus  a  sti 
mulant  for  material  production. 

Education  improves  society,  but  how  much  exertion  on  the 
part  of  parents  is  needful  to  obtain  the  means  of  giving  a  good 
education  to  their  children ! 

What  immense  labors,  moral  as  well  as  material,  are  encoun 
tered  in  the  desire  of  attaining  a  more  distinguished  position  in 
society ! 

One  may  live  as  well  in  a  hut  as  in  a  villa ;  protection  from 
rain  and  cold  can  be  secured  in  the  plainest  habits  as  well  as 
in  elegant  and  expensive  clothing. 

Jewels  and  plate  are  not  more  convenient  in  gold  and  silver 
than  in  steel  and  tin  ;  but  the  distinction  attached  to  their  pos 
session  provokes  the  exertion  of  both  mind  and  body,  encourages 
order  and  economy,  and  society  is  indebted  to  this  stimulant  for 
a  considerable  portion  of  its  productive  power. 

The  independent  gentleman,  whose  only  occupation  consists 
in  preserving,  receiving,  and  consuming  his  income,  exerts, 
in  various  ways,  an  influence  upon  intellectual  and  material 
production,  first  supporting  by  his  expenditure,  art,  science, 
and  products  of  taste  and  luxury ;  then  by  fulfilling,  so  to  speak, 
the  function  of  preserving  and  increasing  the  material  capital  of 
society ;  then,  finally,  in  exciting  by  his  luxury  the  emulation  of 
all  other  classes.  Just  as  a  whole  school  is  stimulated  to  labor 
for  rewards  of  which  only  a  few  can  obtain  and  enjoy  the  pos 
session,  a  great  fortune  and  the  display  which  accompanies  it, 
stimulates  a  whole  society.  But  this  influence  disappears  where 
opulence  is  the  result  of  usurpation,  extortion,  or  imposition,  or 
where  it  is  not  possible  to  possess  and  to  enjoy  it  openly. 

Manufacturing  industry  furnishes  either  the  instruments  of  pro 
duction,  the  means  of  satisfying  our  wants,  or  objects  of  luxury. 


382  THEORY. 

Generally,  these  two  last  classes  of  articles  are  confounded. 
The  different  ranks  of  society  are  readily  distinguished  by  their 
houses,  furniture,  dress,  the  splendor  of  their  equipage,  or  the 
number  and  the  style  of  their  retinue.  In  the  lower  stages  of 
manufacturing  industry,  this  distinction  is  scarcely  perceptible ; 
that  is,  when  all  are  badly  lodged,  fed,  and  clothed,  there  is  no 
room  for  emulation.  Emulation  grows  and  becomes  efficacious 
in  proportion  as  trade  flourishes.  In  prosperous  manufacturing 
countries,  all  are  well  lodged  and  clothed,  whatever  may  be  the 
nature  or  variety  of  manufactured  goods  which  are  consumed. 
However  little  the  aptitude  of  a  man  for  labor,  he  is  never 
willing  to  present  the  appearance  of  indigence.  Thus,  manu 
factured  articles  excite  social  production  by  stimulants  which 
agriculture  cannot  offer  with  its  coarse  domestic  fabrics,  its  raw 
materials,  and  its  food. 

There  is,  it  is  true,  a  great  difference  in  the  kind  of  food,  and 
excellent  articles  of  food  and  drink  have  their  attractions.  But 
our  repasts  are  not  taken  in  public ;  and  the  German  proverb 
justly  remarks,  "People  see  my  cravat,  but  not  my  stomach." 
If,  from  youth,  people  are  accustomed  to  coarse  food,  they 
hardly  think  of  better.  Moreover,  when  consumption  of  food 
is  reduced  to  the  productions  of  the  vicinity,  it  has  very  narrow 
limits.  In  temperate  climes,  these  limits  are  enlarged  only  by 
the  arrival  of  food  from  southern  regions.  But,  as  we  have 
seen  in  a  preceding  chapter,  such  food  can  be  procured  in 
sufficient  quantity  for  the  supply  of  a  whole  population  only  by 
the  means  of  a  foreign  trade  in  manufactured  articles. 

It  is  obvious  that  tropical  products,  when  not  raw  materials 
for  manufactures,  serve  rather  as  stimulants  than  as  articles  of 
nourishment.  No  one  can  deny  that  barley  coffee  without  sugar 
is  as  nourishing  as  Mocha  with  sugar.  Even  supposing  that 
those  articles  contain  some  nutriment,  they  are  in  this  respect 
of  so  little  importance  as  scarcely  to  be  entitled  to  take  rank 
among  the  great  articles  of  human  aliment.  Spices  and  tobacco 
in  particular  are  nothing  else  but  stimulants,  that  is  to  say,  their 
social  usefulness  consists  in  adding  to  the  enjoyments  of  the 
mass  of  the  population,  exciting  them  to  labor  of  mind  and  body. 


MANUFACTURING    INDUSTRY. 

In  some  countries,  among  persons  who  live  upon  salaries  and 
incomes,  very  false  ideas  are  formed  about  what  they  call  the 
luxury  of  the  lower  classes.  They  wonder  at  workmen  drinking 
coffee  with  sugar,  and  they  boast  of  the  time  when  they  were 
satisfied  with  gruel  of  oatmeal;  they  seem  to  regret  that  the 
peasant  has  changed  his  poor  and  constant  dress  of  drill  for  one 
of  woollen  cloth ;  they  fear  that  the  maid-servant  cannot,  ere 
long,  be  distinguished  from  her  mistress ;  they  exalt  the  sump 
tuary  regulations  of  past  times.  But  if  we  measure  the  labor 
of  the  workman  in  countries  where  he  is  fed  and  clothed  like  the 
rich,  and  in  those  where  he  is  satisfied  with  coarse  food  and  with 
coarse  vestments,  we  shall  find  that  in  the  former  the  increase 
of  their  enjoyments,  far  from  injuring  the  general  prosperity, 
has  augmented  the  productive  power  of  society.  Workmen 
receive  daily  twice  or  three  times  more  than  formerly.  Sump 
tuary  laws  have  effected  nothing  but  to  extinguish  emulation 
among  the  mass  of  the  inhabitants,  and  have  encouraged  only 
laziness  and  routine.* 

Products  must  undoubtedly  be  created  before  being  consumed, 
so  that,  generally  speaking,  production  necessarily  precedes 
consumption.  But  in  national  economy  consumption  frequently 
precedes  production.  Manufacturing  nations,  sustained  by  con 
siderable  capital,  and  less  limited  in  their  production  than 
purely  agricultural  countries,  generally  make  advances  to  the 
latter  on  the  product  of  their  coming  crop ;  the  latter,  in  this 
way,  consume  before  producing ;  they  have  been  slow  to  pro 
duce  but  prompt  to  consume.  The  same  fact  occurs  upon  a 
much  larger  scale  in  the  relations  between  town  and  country ; 
the  nearer  the  manufacturer  is  to  the  agriculturist,  the  more 
stimulants  he  has  to  offer  in  articles  of  consumption,  the  more  is 
the  farmer  excited  to  his  special  work  of  production. 

Among  the  most  effective  stimulants  are  those  presented  by 

*  This  judicious  appreciation  of  the  utility  of  the  consumption  of  arti 
cles  of  luxury  absolutely  annihilates  the  declamation  of  which  they  have 
been  the  object.  The  same  view  has  been  taken  by  other  economists,  though 
not  with  the  same  fulness  and  power ;  they  regard  the  consumption  of 
luxuries  as  a  stimulus  of  labor.  —  [H.  R.j 


384  THEORY. 

the  civil  and  political  organization.  When  it  is  not  possible  by 
work  and  by  wealth  to  rise  from  the  lowest  ranks  of  society  to 
the  highest,  when  he  who  possesses  must  avoid  making  a  display 
of  his  fortune,  or  enjoying  it  openly,  for  fear  of  being  disturbed 
in  his  rights,  or  for  fear  of  being  charged  with  presumption  and 
insolence ;  when  the  producing  classes  are  excluded  from  digni 
ties,  from  participation  in  the  government,  in  legislation,  and 
in  the  administration  of  justice  ;  when  remarkable  achievements 
in  agriculture  and  manufacturing  industry  and  commerce  procure 
no  public  distinction,  the  strongest  motives  for  consumption 
and  production  do  not  exist. 

Every  law,  every  public  institution,  tends  directly  or  indirectly 
to  strengthen  or  weaken  production  or  consumption,  or  productive 
power. 

Patents  for  inventions  are  like  premiums  offered  to  genius. 
The  hope  of  obtaining  a  premium  stirs  the  mind  and  directs  it 
toward  industrial  improvements.  They  excite  a  spirit  of  inven 
tion  in  society,  and  destroy  the  fatal  prejudice  which  clings  to 
uncultivated  nations,  inclining  them  to  adhere  to  old  habits  and 
old  processes.  They  procure  for  those  who  possess  only  the 
genius  of  discovery  the  means  of  obtaining  a  living,  and  the 
assurance  of  receiving  some  portion  of  the  profits  which  men 
of  capital  may  make  by  introducing  the  invention. 

Protective  duties  operate  as  stimulants  to  all  branches  of  do 
mestic  industry  in  which  foreign  manufacturers  have  the  advan 
tage,  especially  of  those  branches  for  which  the  country  is 
adapted.  They  confer  an  advantage  upon  the  manufacturer 
and  upon  the  workman,  inciting  them  to  increase  of  know 
ledge  and  skill,  and  upon  the  native  or  foreign  capitalist,  by 
offering  them  permanent  investments  of  special  advantage  and 
great  ultimate  gain. 


IMPORTS    AND    EXPORTS.  385 


CHAPTER   XVI. 

DUTIES  UPON  IMPORTS  AND  EXPORTS  CONSIDERED  AS  A 
POWERFUL  MEANS  OF  CREATING  AND  STRENGTHENING 
THE  MANUFACTURING  INDUSTRY  OF  THE  COUNTRY. 

IT  is  no  part  of  our  plan  to  treat  of  those  means  of  encouraging 
the  industry  of  a  country  which  are  universally  acknowledged 
to  be  efficient  and  practicable.  In  this  class  stand,  for  instance, 
establishments  of  education,  and  especially  schools  of  science 
and  art,  public  expositions,  premiums,  the  improvement  of  routes 
of  transportation,  patents ;  finally,  all  the  laws  and  all  the  insti 
tutions  designed  to  favor  industry,  and  facilitate  and  control 
internal  and  external  commerce.  We  speak  here  only  of  legis 
lation  upon  commercial  duties,  so  far  as  they  are  means  of  pro 
moting  industry. 

In  our  system  (the  German),  it  is  but  by  way  of  exception 
that  prohibitions  and  duties  upon  exports  can  be  subjects  of 
consideration  ;*  in  every  country,  raw  materials  should  be  sub 
ject  to  import  duties  only  for  revenue,  and  not  for  the  purpose 
of  protecting  the  agriculture  of  the  country ;  in  manufacturing 

*  Prohibitions  or  duties  upon  the  exports  of  raw  materials  for  the 
benefit  of  the  manufacturing  interests  are  allowed  as  exceptions  by  the 
more  liberal  economists.  They  condemn  them  in  theory,  in  so  far  as  they 
favor  the  manufacturer,  who  should  in  fact  be  benefited  by  giving  the  pro 
ducer  of  the  raw  material  the  largest  market  possible.  But  J.  B.  Say, 
(Cours  Complet  IV* partie,  Chap.  XVIII.,)  does  not  wholly  reject  them  in 
cases  where  the  raw  material  in  question  is  not  susceptible  of  increase  by 
giving  it  a  more  extensive  market.  "  It  is  from  this  consideration,"  he 
says,  "  that  in  France  they  interdict,  perhaps  wisely,  the  exportation  of 
old  cordage  and  rags,  of  which  paper  is  made."  McCulloch,  in  the  preface 
to  his  Principles  of  Political  Economy,  after  having  said  that  there  are  a  small 
number  of  commodities  in  which  a  nation  would  seriously  mistake  its  in 
terests  by  permitting  their  free  exportation,  asserts,  upon  the  ground  of 
this  proposition,  that  if  England  had  the  monopoly  of  all  the  mineral  coal, 
it  would  be  due  to  her  wealth,  as  well  as  to  her  safety,  to  prohibit  the  ex 
portation  altogether.  —  [H.  R.] 
25 


386  THEORY. 

countries,  articles  of  luxury  from  the  torrid  zone,  and  not  com 
modities  of  the  first  necessity,  such  as  grain  and  cattle,  should 
first  attract  the  attention  of  the  authorities,  and  first  bear  the 
burden  of  the  public  revenue ;  tropical  countries,  and  nations  of 
rather  limited  territory,  the  population  of  which  is  still  sparse 
and  not  advanced  in  civilization  or  in  their  social  and  political 
institutions,  should  impose  duties  only  upon  the  imports  of 
manufactured  articles  for  revenue. 

Revenue  duties  should  always  be  so  moderate  as  not  sensibly 
to  restrain  importation  and  consumption ;  otherwise,  they  would 
not  only  diminish  the  productive  power  of  the  country,  but  must 
fail  of  their  object. 

Measures  of  protection  are  legitimate  only  for  the  purpose  of 
y  aiding  and  strengthening  the  manufacturing  industry  of  nations 
of  extensive  and  consolidated  territory,  of  considerable  popula 
tion,  great  natural  resources,  advanced  agriculture,  a  high 
degree  of  civilization  and  political  knowledge,  enabled  by  these 
advantages  to  take  rank  among  those  which  are  foremost  in 
agriculture,  manufacturing  industry,  and  commerce, — among  the 
first  maritime  and  continental  powers. 

Protection  is  accorded  under  the  form  either  of  absolute  pro 
hibition  of  certain  manufactured  products,  or  of  high  duties,  so 
high  as  to  be  nearly  equivalent  to  prohibition,  or  finally  of 
moderate  duties.  No  one  of  these  modes  is  absolutely  good  or 
bad;  the  particular  condition  of  the  nation  and  its  industry 
indicates  which  is  applicable. 

"War,  which  creates  an  unavoidable  state  of  prohibition,  has  a 
great  influence  upon  the  selection  of  means;  in  time  of  war 
exchange  ceases  between  the  belligerent  parties,  and  each 
country,  whatever  be  its  economical  condition,  must  live  upon 
its  own  resources.  Then  in  the  nation  less  advanced  in  respect 
to  manufactures,  manufacturing  industry,  and  in  the  one  most 
advanced,  agriculture  makes  extraordinary  progress,  so  that  if 
the  war  is  protracted  for  a  series  of  years  it  becomes  proper  for 
the  former  to  uphold  an  industry,  unable  to  sustain  the 
competition  of  the  latter  by  continuing  for  some  time  during  the 
peace  the  restraint  which  the  war  had  imposed. 


IMPORTS    AND    EXPORTS.  387 

Such  was  the  position  of  France  and  Germany  after  the 
general  peace.  If  France  had,  in  1815,  admitted  the  competition 
of  Great  Britain,  as  did  Germany,  Prussia,  and  the  United 
States,  she  would  have  experienced  the  same  disasters  as  those 
countries ;  the  greater  part  of  the  manufactures,  which  had  risen 
under  the  necessities  of  the  war,  would  have  perished ;  of  the 
progress  actually  made  in  all  branches  of  manufacture,  in  the 
improvement  of  her  routes  of  transportation  and  travel,  in 
foreign  trade,  in  steam  navigation,  river  and  maritime ;  of  the 
increase  in  the  value  of  her  soil,  which,  be  it  remarked  in  passing, 
has  doubled  in  France  since  that  period  ;  finally,  of  the  increase 
of  her  population  and  public  income,  there  has  not  been,  and 
cannot  be,  a  question  among  persons  who  have  made  themselves 
well  acquainted  with  the  industrial  condition  of  France.  Manu 
factures  were  yet  in  their  infancy  ;  the  country  possessed  but  few 
canals  ;  mines  were  scarcely  opened,  a  failure  due  to  political  con 
vulsions  and  war ;  large  capitals  were  wanted,  as  well  as  adequate 
technical  knowledge,  skilful  workmen,  industrial  intelligence,  en 
terprise  ;  the  general  inclination  was  more  for  war  than  for  the  arts 
of  peace ;  the  small  amount  of  capital  accumulated  during  war 
was  attracted  toward  a  suffering  agriculture.  France  then  only 
perceived  the  progress  which  England  had  made  during  the  war ; 
she  could  now  obtain  from  England  machines,  men  of  skill,  work 
men,  capital,  and  a  spirit  of  enterprise;  the  exclusive  reservation 
of  the  internal  market  awakened  then  all  their  power,  and  stimu 
lated  the  employment  of  all  their  natural  resources.  The  results 
of  this  system  of  exclusion  are  now  before  our  eyes ;  the  blindest 
cosmopolitism  could  alone  deny  them ;  it  alone  could  pretend  that 
under  the  reign  of  free  competition,  France  would  have  made 
greater  progress.  The  experience  of  Germany,  of  the  United 
States,  and  of  Russia  above  all,  proves  the  contrary  beyond  all 
question. 

In  stating  that  the  prohibitive  system  has  been  useful  since 
1815,  our  intention  is  not  to  defend  its  vices  nor  its  exaggera 
tions,  nor  to  maintain  the  propriety  or  the  necessity  of  retaining 
it.  France  has  committed  an  error  in  restraining  by  duties  the 
importation  of  raw  materials  and  agricultural  products,  such  as 


388  THEORY. 

iron,  coal,  wool,  corn,  and  cattle  ;*  she  would  have  committed 
another,  if,  after  her  manufacturing  industry  becomes  sufficiently 
firm,  she  should  not  pass  by  degrees  to  a  system  of  moderate 
protection ;  if  she  should  not  endeavor  by  means  of  a  moderate 
competition  to  stimulate  the  emulation  and  activity  of  her 
manufacturers. 

In  the  matter  6f  protective  duties  it  is  proper  to  distinguish 
between  the  case  of  a  nation  wishing  to  pass  from  a  state  of 
open  competition  to  the  protective  system,  or  from  prohibition 
to  moderate  protection ;  in  the  first  case,  the  duties  should  be 
at  first  low,  and  be  gradually  increased ;  in  the  second,  being 
at  first  very  high,  they  must  be  gradually  diminished.  A 
country  where  the  duties  are  not  sufficiently  protective,  but 
which  is  destined  by  its  position  to  great  progress  in  manufac 
tures,  must  aim,  above  all,  to  encourage  industries  which  produce 
articles  of  general  consumption.  Because  the  total  value  of 
these  commodities  is  immensely  larger  than  that  of  the  objects 
of  luxury,  however  much  more  costly  may  be  the  latter. 
Their  manufacture  puts  in  motion  a  considerable  amount  of 
natural,  intellectual,  and  personal  productive  power ;  and,  as  it 
requires  large  capital,  it  induces  constant  economy,  and  attracts 
foreign  capital  from  all  quarters,  as  well  as  productive  power  of 
every  kind.  It  exercises  with  its  growth  a  powerful  influence  on 
the  increase  of  population,  on  the  prosperity  of  agriculture,  and 
especially  on  the  development  of  foreign  trade  ;  because  the  less 
civilized  countries  require  chiefly  manufactured  products  of 
general  use,  and  temperate  climes  find  in  the  production  of  such 
articles  the  principal  means  of  maintaining  direct  intercourse 

*  There  is  no  article  of  manufacture  more  important  than  iron — none  in 
which  it  is  more  important  that  a  nation  should  be  independent  of  all  the 
chances  of  war  or  commercial  restriction.  That  article,  the  large  employ 
ment  of  which  is  the  chief  characteristic  of  civilization,  should  certainly, 
if  possible,  be  a  domestic  production.  Crude  or  pig  iron,  although  a  raw 
material  in  certain  branches  of  industry,  is  itself  as  much  a  manufactured 
article  as  any  other  whatever.  So,  in  regard  to  wool,  the  terms  employed 
by  List  are  too  general ;  it  should,  in  regard  to  every  and  each  commo 
dity,  be  a  subject  of  special  and  sound  discretion  what  should  be  done 
for  the  interests  of  labor  and  national  independence.  —  [S.  C.] 


IMPORTS    AND    EXPORTS.  389 

with  tropical  countries.  A  country,  for  instance,  which  imports 
cotton,  yarns,  and  cloth,  cannot  trade  directly  with  Egypt, 
Louisiana,  or  Brazil ;  for  it  cannot  furnish  those  countries  with 
cotton  goods,  nor  take  from  them  raw  cotton.  These  articles 
greatly  contribute,  by  their  large  collective  value,  to  maintain  a 
proper  equilibrium  between  the  imports  and  the  exports  of 
a  country,  and  to  preserve  or  to  procure  for  the  country  the 
necessary  means  of  circulation.  It  is  besides  by  the  attainment 
and  the  maintenance  of  those  great  industries  that  the  nation 
secures  and  preserves  its  industrial  importance ;  for  the  inter 
ruptions  of  trade  caused  by  war  inflict  little  damage  when  they 
have  no  other  result  than  to  stop  the  importation  of  articles  of 
luxury;  they  are  followed,  on  the  other  hand,  by  terrible 
calamities,  when  they  involve  destitution  and  high  prices  for 
ordinary  manufactured  products,  with  the  closing  of  large  mar 
kets  for  agricultural  products.  Finally,  smuggling  and  false 
valuations,  for  the  purpose  of  eluding  duties,  are  much  less  to 
be  feared  and  much  more  easily  prevented  in  reference  to  those 
^oods  than  as  to  objects  of  luxury. 

Factories  and  manufactures  are  plants  of  slow  growth,  and 
protective  legislation,  which  suddenly  changes  existing  com 
mercial  relations,  injures  the  country  which  it  was  intended 
to  benefit.  Duties  should  rise  in  proportion  as  capital,  industrial 
skill,  and  the  spirit  of  enterprise,  increase  in  the  CQuntry  or 
come  to  it  from  abroad ;  in  proportion  as  the  nation  becomes  able 
to  work  up  the  raw  materials  which  it  formerly  exported.  It  is 
wise  to  determine  in  advance  the  scale  of  protective  duties  in 
order  to  offer  a  safe  business  to  capitalists,  as  well  as  to  men  of 
skill ;  to  workmen  who  may  form  establishments  in  the  country, 
or  to  those  whom  it  may  attract  from  abroad.  It  is  indis 
pensable  to  maintain  these  rates  without  variation,  not  diminish 
ing  them  before  the  fixed  time,  for  the  bare  apprehension  of  a 
violation  of  the  engagement,  would,  in  a  great  measure,  destroy 
the  effect  of  the  encouragement. 

In  what  proportion  should  duties  upon  imports  rise,  when  a 
nation  is  passing  from  open  competition  to  the  protective  system, 
and  fall  when  the  nation  is  passing  from  the  prohibitive  system 


390  THEORY. 

to  moderate  protection  ?  Theory  cannot  determine.  Every 
thing  depends  on  the  circumstances  and  the  relations  between 
the  less  and  the  more  advanced  country.  The  United  States, 
for  instance,  would  take  into  particular  consideration  the  market 
which  England  offers  to  their  raw  cotton,  and  the  English  colo 
nies  to  the  products  of  their  fields  and  fisheries,  as  well  as  the 
higher  price  of  labor ;  on  the  other  hand,  it  is  a  favorable  cir 
cumstance  for  them,  more  than  for  any  other  country,  that  they 
may  rely  upon  receiving  capital,  skilful  men,  and  laborers, 
from  Great  Britain. 

As  a  general  rule,  it  may  be  said,  that  a  country  in  which  a 
branch  of  manufacture  cannot  succeed  with  the  aid  of  a  protec 
tion  of  from  forty  to  sixty  per  cent,  at  the  beginning,  and  sus 
tain  itself  afterwards  with  twenty  or  thirty,  does  not  possess  the 
essential  conditions  of  a  manufacturing  industry.* 

*  It  must  be  very  difficult  to  lay  down  any  general  rule  as  to  the  rate  of 
protective  duties.  The  rates  named  must  be  more  than  sufficient  in  most 
cases ;  but  if  there  is  any  design  upon  the  part  of  foreign  governments, 
foreign  merchants  or  manufacturers,  to  crush  any  infant  industry,  the  duty 
must  be  placed  high  enough  to  repress  any  efforts  of  this  kind.  It  is  well 
known  that  in  many  departments  of  English  industry,  those  who  are  in 
terested  will  not  only  carry  them  on  at  a  loss  for  years,  but  furnish  large 
sums  of  money  besides,  to  aid  in  retaining  markets  from  which  they  are 
in  danger  of  being  excluded  by  commercial  restrictions  or  industrial  com 
petition.  The  old  manufacturer,  long  established,  with  abundance  of 
capital,  and  well  trained  and  skilled  workmen  at  his  command,  can,  by  the 
sacrifice  of  his  profits,  or  a  small  additional  loss  for  a  few  years,  effectually 
crush  the  infant  industry  which  dares  to  enter  the  field  of  competition. 
Scarcely  a  branch  of  industry  has  sprung  up  in  the  United  States,  which 
has  not,  at  the  first,  encountered  a  severe  struggle  by  the  reduction  of  the 
price  of  the  foreign  article  below  that  which  the  new  manufacture  was 
expected  to  encounter. 

In  every  instance  where  an  additional  article  of  American  manufacture 
has  been  brought  into  the  market  at  the  current  prices,  an  effort  has  been 
made  by  the  foreign  manufacturer  to  drive  the  new  competitor  from  the 
market,  or  to  ruin  him.  He  having  supposed  that  he  could  safely 
enter  into  the  competition  at  the  current  prices,  soon  finds  he  has  to  sub 
mit,  and  perhaps  for  years,  to  prices  far  below  the  rates  on  which  his  esti 
mate  was  made.  Hence,  in  the  United  States,  a  very  large  proportion  of 
the  first  adventurers  in  the  many  branches  of  manufacture  now  established 


IMPORTS    AND    EXPORTS.  391 

The  causes  of  this  inability  may  be  more  or  less  easy  to  re 
move.  Among  those  which  may  easily  be  remedied  are  the  want 
of  routes  of  transportation  and  travel,  of  technical  knowledge, 
of  experience  and  enterprise  in  industry :  among  the  more  ob 
stinate  are  the  want  of  inclination  for  labor,  deficiency  of  know 
ledge,  morality  and  uprightness  in  the  people,  the  low  state  of 

failed,  and  lost  all  their  capital  and  labor.  The  establishment  falling  into 
other  hands  at  a  great  sacrifice,  has  often  been  carried  on  successfully 
against  foreign  competition.  In  most  instances,  new  branches  of  manufac 
ture  have  succeeded  in  the  United  States  by  the  production  of  an  article 
superior  in  quality  and  design  to  the  corresponding  foreign  article.  This 
•would  sell  at  a  higher  price  than  the  foreign,  and  maintain  its  place  in  the 
market  upon  its  merits. 

The  disposition  of  foreigners  to  bring  against  our  rising  industry  the  full 
power  of  capital  and  competition  is  openly  avowed  in  a  recent  Report  made 
to  the  British  Parliament  by  the  "  Commissioner  appointed  under  the  pro 
visions  of  the  Act  V.  and  VI.  Viet.,  c.  99,  to  inquire  into  the  operation  of 
that  Act,  and  into  the  state  of  the  population  in  the  mining  districts,  1854." 
The  following  passage  is  from  the  Report  of  that  year : — 

"  I  believe  that  the  laboring  classes  generally,  in  the  manufacturing  dis 
tricts  of  this  country,  and  especially  in  the  iron  and  coal  districts,  are  very 
little  aware  of  the  extent  to  which  they  are  often  indebted  for  their  being 
employed  at  all,  to  the  immense  losses  which  their  employers  voluntarily 
incur  in  bad  times,  in  order  to  destroy  foreign  competition,  and  to  gain  and 
keep  possession  of  foreign  markets.  Authentic  instances  are  well  known 
of  employers  having  in  such  times  carried  on  their  works  at  a  loss  amount 
ing  in  the  aggregate  to  three  or  four  hundred  thousand  pounds  in  the  course 
of  as  many  years.  If  the  efforts  of  those  who  encourage  the  combinations 
to  restrict  the  amount  of  labor,  and  to  produce  strikes,  were  to  be  success 
ful  for  any  length  of  time,  the  great  accumulations  of  capital  could  no 
longer  be  made,  which  enable  a  few  of  the  most  wealthy  capitalists  to 
overwhelm  all  foreign  competition  in  times  of  great  depression,  and  thus 
to  clear  the  way  for  the  whole  trade  to  step  in  when  prices  revive,  and  to 
carry  on  a  great  business  before  foreign  capital  can  again  accumulate  to 
such  an  extent  as  to  be  able  to  establish  a  competition  in  prices  with  any 
chance  of  success.  The  large  capitals  of  this  country  are  the  great  instru 
ments  of  warfare  (if  the  expression  may  be  allowed)  against  the  competing 
capitals  of  foreign  countries,  and  are  the  most  essential  instruments  now 
remaining,  by  which  our  manufacturing  supremacy  can  be  maintained ; 
the  other  elements  —  cheap  labor,  abundance  of  raw  materials,  means  of 
communication,  and  skilled  labor  —  being  rapidly  in  process  of  being 
equalized."  —  [S.  C.] 


392  THEORY. 

agriculture,  and  consequently,  insufficiency  of  material  capital ; 
but  more  than  all,  faulty  institutions,  the  absence  of  liberty  and 
its  proper  guarantees  ;  and  lastly,  a  territory  so  badly  adjusted 
as  to  make  it  difficult  to  repress  smuggling. 

Industries  of  luxury  should  not  receive  attention  until  in  the 
last  place  ;  and  they  less  deserve  protection,  because  they  require 
a  high  degree  of  technical  knowledge  ;  because  their  products, 
compared  with  the  total  production  of  the  country,  constitute 
but  an  insignificant  value ;  because  they  can  be  readily  obtained 
abroad  for  agricultural  products,  raw  materials,  or  manufactured 
goods  of  general  consumption  ;  because  the  interruption  of  their 
delivery,  in  time  of  war,  involves  no  serious  disturbance  of 
trade  or  labor ;  and  lastly,  because  nothing  is  easier  than  to 
elude,  by  smuggling,  high  duties  upon  such  articles. 

Nations  which  are  not  yet  very  advanced  in  the  manufacture 
of  machinery,  ought  to  admit  free  all  complicated  machines,  or 
at  least  with  light  duties,  until  they  shall  not  be  inferior  in  the 
construction  of  machines  to  the  most  skilful  nation. 

Machine-shops  are  in  some  respects  manufactures  of  manu 
factories,  and  any  import  duty  upon  foreign  machinery  is  an 
impediment  to  manufacturing  industry  in  general.  But  in  con 
sideration  of  their  powerful  influence  upon  the  whole  business 
of  manufactures,  it  is  important  that  a  nation  be  independent 
of  the  vicissitudes  of  war  for  its  supply  of  machinery.  This 
industry  has  very  special  claims  upon  the  direct  favor  of  the 
State,  in  case  with  moderate  duties  it  is  not  able  to  encounter  com 
petition  from  abroad.  The  State  should  at  least  encourage  and 
sustain  effectually  the  machine-shops  of  the  country  to  such 
extent  that  in  time  of  war  they  may  at  once  suffice  for  the  most 
urgent  wants  of  the  country,  and  then,  in  case  of  protracted 
interruption,  serve  as  models  for  similar  establishments. 

Drawbacks  need  not  come  under  consideration  in  our  system, 
except  as  to  partly  wrought  materials  imported  from  abroad, 
like  cotton-yarn,  which  deserves  protection  by  duties  on  the 
articles  made  from  it,  that  the  country  may  be  prepared  by  slow 
degrees  to  produce  them  itself. 

Premiums  are  inadmissible  as  a  permanent  means  of  aiding 


IMPORTS    AND    EXPORTS. 

the  industry  of  a  country  in  its  struggle  with  that  of  more 
advanced  nations  in  other  markets ;  they  are  still  more  inad 
missible  as  a  means  of  obtaining  more  full  supplies  from 
nations  which  have  already  made  some  progress  in  manufac 
tures.  They  may,  however,  be  sometimes  employed  by  way 
of  temporary  encouragements ;  for  instance,  when  the  spirit  of 
enterprise  in  a  nation  slumbers,  and  needs  only  to  be  awakened 
and  to  find  some  support  in  its  earliest  efforts  to  establish  a 
powerful  and  durable  industry,  capable  not  only  of  supplying 
with  its  products  the  home  market,  but  of  sending  forth  some 
thing  into  the  markets  of  the  world.  But  even  in  such  case,  it 
were  well  to  consider  whether  the  State  would  not  do  better  to 
lend  money  without  interest  as  a  stimulant  to  special  enter 
prises,  and  to  bestow  other  advantages,  or  whether  it  were  not 
better  to  excite  these  first  attempts  by  the  creation  of  companies, 
and  by  advancing  to  them  from  the  public  treasury,  or  upon  public 
credit,  a  part  of  the  needful  capital,  giving  to  private  shareholders 
a  preference  in  the  receipt  of  dividends  or  interest.  We  may 
cite,  as  an  example,  the  commercial  and  maritime  enterprises  with 
distant  countries,  which  individual  efforts  have  not  yet  under 
taken,  the  establishment  of  steam  lines  to  distant  regions  and 
new  colonies.* 

*  Adam  Smith  is  opposed  to  premiums  on  exports.  "  We  cannot,"  he 
says,  "  force  strangers  to  purchase  from  us  as  we  force  our  fellow-citizens. 
Consequently,  we  are  told  we  must,  by  premiums,  pay  strangers  to  pur 
chase  from  us."  But  drawbacks  find  favor  with  him,  because  encourage 
ments  in  that  shape  do  not  have  the  effect  of  diverting  to  other  pursuits 
any  larger  portion  of  the  capital  of  the  country  than  would  have  naturally 
found  its  way  into  them,  but  only  have  the  object  of  preventing  the  portion  of ' 
capital  employed  in  this  special  branch  from  being  forced  into  some  other 
channel  by  the  effect  of  the  duty.  It  is  surprising  after  this,  that  Say 
(Cours  Complet,  IV.  partie,  Chap.  XX.}  includes  both  premiums  upon  ex 
ports  and  drawbacks  in  the  same  sweeping  denunciation,  and  that  he  makes 
this  objection  to  them:  "Why  should  we  permit  strangers  to  escape  the 
duty  which  we  make  our  own  people  pay  ?"  It  is  the  more  surprising,  as 
Say,  in  his  Political  Economy,  (Book  II.,  Chap.  XVII.,)  has,  without  quali 
fication,  adopted  the  very  doctrine  of  Smith.  —  [H.  K.] 


394  THEORY. 

CHAPTER   XVII. 
IMPORT  DUTIES  AND  THE  REIGNING  SCHOOL* 

THE  reigning  School  makes  no  distinction,  as  to  the  effect 
of  protective  duties,  between  agricultural  and  manufacturing 
industry ;  it  wrongly  points  to  the  unfavorable  influence  which 
such  duties  have  upon  the  former,  as  a  proof  that  they  operate 
unfavorably  also  upon  the  latter.  In  what  regards  the  intro 
duction  of  manufactures,  the  School  does  not  distinguish  between 
nations  which  have  no  vocation  that  way,  and  those  which  are 
invited  to  that  career  by  the  nature  of  their  territory,  by  their 
advance  in  agriculture  and  civilization,  and  by  the  desire  of 
realizing  future  prosperity,  independence,  and  power. 

The  School  does  not  perceive  that,  under  the  operation  of 
unrestricted  competition  with  nations  of  experience  in  manu 
factures,  a  country  not  much  advanced,  however  real  its  vocation 
for  that  industry,  cannot  without  protection  attain  to  a  complete 
manufacturing  development  and  to  entire  independence. 

It  takes  no  account  of  the  influence  of  war,  and  does  not 
notice,  particularly,  that  war  constitutes  an  actual  prohibition, 
of  which  the  prohibitive  system  by  duties  is  but  a  necessary 
continuation. 

It  avails  itself  of  the  advantages  of  internal  free  trade,  to 
prove  that  nations  can  attain  the  highest  state  of  prosperity  and 
power  only  by  absolute  freedom  of  international  trade,  whilst 
•history  proves  positively  the  contrary. 

It  argues  that  protective  measures  confer  a  monopoly  upon 
the  manufacturers  of  a  country,  tempting  them  to  inertness, 
whilst  internal  competition  in  any  country  stimulates  to  active 
efforts  and  economy. 

It  would  make  us  believe  that  protective  duties  favor  manu 
factures  at  the  expense  of  agriculture,  when  it  is  obvious  that 
agriculture  derives  from  domestic  manufacturing  industry, 

*  The  disciples  of  Smith  and  Say. 


IMPORTS    AND    EXPORTS.  395 

immense  advantages,  compared  with  which,  the  sacrifices  imposed 
by  the  protective  system  are  wholly  insignificant. 

Its  grand  argument  against  the  protective  system,  is  the  ex 
pense  of  its  administration,  and  the  mischiefs  of  smuggling. 
These  mischiefs  are  not  disputed ;  but  must  our  minds  be  wholly 
absorbed  by  them,  whilst  devising  measures  having  such  an  im 
portant  influence  upon  the  existence,  the  power,  and  the  pros 
perity  of  a  country  ?  Are  the  mischiefs  and  evils  of  standing 
armies  and  war,  a  sound  argument  against  national  self-defence  ? 

It  is  alleged  that  duties  which  materially  exceed  premiums 
of  insurance  upon  smuggling,  only  serve  to  encourage  this 
unlawful  trade,  and  by  no  means  help  the  manufactures  of  a 
country ;  but  such  objections  are  well  founded,  only  in  regard  to 
an  imperfect  administration  of  the  customs,  to  small  and  irre 
gular  territories,  to  consumption  on  the  frontiers,  and  to  high 
duties  upon  articles  of  luxury  in  small  volume.  But  experience 
has  everywhere  shown,  that  with  a  good  organization,  and  with  a 
wisely  arranged  tariff,  the  object  of  protection  cannot,  in  large 
States  whose  territory  is  well  defined  and  regular,  be  sensibly 
counteracted  by  smuggling.  As  to  the  expenses  of  customs,  the 
collection  of  revenue  duties  absorbs  already  a  large  portion  of 
them,  and  the  School  does  not  pretend  that  the  great  States  are 
bound  to  dispense  with  that  kind  of  taxation. 

The  School  does  not,  however,  reject  all  protection  by  duties 
upon  imports. 

There  are  three  cases  in  which  Adam  Smith  allows  the  pro 
tection  of  native  industry :  first,  as  a  measure  of  retaliation, 
if  a  foreign  nation  rejects  our  goods,  and  if  we  have  reason  to 
hope  that  reprisals  will  incline  it  to  withdraw  its  restrictions ; 
secondly,  for  the  national  defence,  when  the  articles  manufac 
tured,  and  necessary  for  that  purpose,  could  not  have  been  pro 
duced  in  the  country,  under  the  operation  of  free  competition ; 
thirdly,  as  a  means  of  equalization,  when  foreign  products  are 
less  burdened  than  our  own.  Say  objects  to  protection,  in  all 
these  supposed  cases ;  but  he  allows  it  in  a  fourth,  that  is  of  an 
industry  which  seems  capable  of  becoming  in  a  few  years  strong 
enough  to  sustain  itself  without  such  aid. 


396  THEOKY. 

It  is  Adam  Smith  then,  who  is  willing  to  introduce  into  com 
mercial  policy  the  principle  of  retaliation,  a  principle  which  may 
lead  to  the  most  unwise  and  fatal  measures,  especially  if  the  re 
prisals,  as  required  by  Smith,  must  be  withdrawn  as  soon  as 
foreigners  consent  to  the  repeal  of  the  restrictions  against 
which  they  had  been  directed.  Suppose,  that  Germany  resorts 
to  reprisals,  for  the  obstacles  which  England  opposes  to  the  ex 
portation  of  her  corn  and  timber ;  that  she  prohibits  the  manu 
factured  goods  of  the  latter,  thus  giving  birth  artificially  to 
domestic  manufacturing  industry ;  if  England  afterwards  con 
sents  to  receive  German  corn  and  timber,  must  Germany  sur 
render  to  ruin  an  infant  industry  in  which  immense  investments 
in  money  and  labor  have  been  made!  What  an  extrava 
gance  !  It  would  be  far,  far  better  for  Germany,  quietly  to 
endure  all  the  restrictive  measures  of  England,  in  place  of  en 
couraging  the  rise  of  home  manufactures,  and  of  disturbing 
the  development  of  those  which,  without  a  protection  by  duties, 
would  have  arisen  in  consequence  of  English  prohibition. 

The  principle  of  retaliation  is  rational  and  applicable  only  so 
far  as  it  agrees  with  that  of  the  industrial  education  of  the 
country,  and  becomes  an  auxiliary  to  it. 

Of  course,  it  is  reasonable  and  advantageous  for  a  nation  to 
retaliate  by  restrictions  upon  English  manufactured  products, 
if  England  has  imposed  restrictions  upon  the  agricultural  products 
of  that  country ;  but  only  when  such  nation  is  adapted  to  the 
business  of  manufacturing  industry,  and  has  resolved  upon  it  as 
a  permanent  policy. 

By  the  second  exception,  Adam  Smith  justifies  in  reality  not 
only  the  protection  of  manufactures  which  furnish  munitions  of 
war,  for  instance,  the  manufacture  of  arms  and  powder,  but  the 
whole  protective  system,  as  we  understand  it ;  for  the  manufac 
turing  industry  which  this  system  creates  in  a  country  exerts 
upon  the  increase  of  population,  upon  its  material  wealth,  its 
mechanical  power,  its  independence,  its  intellectual  resources, 
and  consequently,  upon  all  its  means  of  defence,  an  incom 
parably  greater  influence  than  the  mere  manufacture  of  arms 
and  powder. 


IMPORTS    AND    EXPORTS.  397 

The  same  may  be  said  of  the  third  exception.  If  the  taxes 
which  burden  our  production  justify  protective  duties  upon 
foreign  products  less  taxed,  why  may  not  other  disadvantages 
of  our  industry,  as  compared  with  foreign  industry,  be  legiti 
mately  removed  or  met  by  special  legislation,  and  our  own  inter 
nal  industry  protected  against  the  crushing  competition  of  foreign 
industry  ?  * 

*  The  exceptions  to  the  law  of  free  trade,  admitted  by  Adam  Smith,  are 
not  here  set  forth  with  proper  exactness,  nor  suitably  appreciated. 

The  author  of  the  Wealth  of  Nations,  (Book  IV.,  Chap.  II.,)  mentions 
two  instances  in  which  it  is  in  general  advantageous  to  impose  some  duty 
upon  foreign  industry,  for  the  purpose  of  encouraging  home  industry.  The 
first  is  where  a  particular  branch  of  labor  is  necessary  to  the  defence  of  a 
country,  and  Smith  has  referred  on  this  point  to  the  Navigation  Act ;  he 
returns  to  this  topic  in  Chapter  V.  of  the  same  book,  and  admits  that  if  a 
manufacture  important  to  national  defence  cannot  sustain  itself  without 
protection,  it  would  be  reasonable  that  other  industries  should  bear  the 
burden  of  keeping  it  in  vigor ;  that,  according  to  this  principle,  the  pre 
miums  allowed  in  England  upon  the  exportation  of  canvass  and  powder 
were  justifiable.  The  second  case  is,  when  some  domestic  product  is  bur 
dened  with  a  tax,  by  way  of  excise  or  otherwise,  then  it  would  seem  proper 
to  impose  a  similar  duty  upon  the  corresponding  foreign  article.  Farther 
on,  he  admits  a  third  exception  in  the  propriety  of  imposing  corresponding 
or  retaliatory  duties  upon  commodities  from  foreign  countries  which  impose 
duties  upon  the  same  or  similar  articles  in  their  ports :  according  to  him, 
reprisals  may  in  such  cases  be  regarded  as  sound  policy,  if  there  is  any 
probability  that  it  will  lead  to  the  abolishment  of  the  duties  which  provoke 
the  retaliation ;  for,  he  adds,  the  advantage  of  recovering  a  great  foreign 
market  will  more  than  compensate  the  passing  inconvenience  of  paying 
higher  during  a  short  time  for  a  few  kinds  of  merchandise. 

List  is  right  in  maintaining  that  the  exception  which  rests  upon  the  ne 
cessity  of  national  defence  implies  a  concession  of  the  whole  protective 
system  as  he  understands  it,  a  system  in  which  he  finds  a  means  of  in 
creasing  the  resources  and  assuring  the  independence  of  the  country. 
Smith  is  very  moderate  in  the  application  of  his  doctrine,  and  he  makes 
more  than  one  concession  to  the  protective  system.  Take,  for  instance, 
what  he  says  in  Book  V.,  Chap.  II.  "  If  all  protections  were  discontinued, 
and  all  articles  of  foreign  manufacture  were  subjected  to  moderate  duties, 
and  such  as  experience  had  shown  to  yield  the  largest  revenue,  then  our 
own  laborers  would  still  enjoy  in  our  market  a  considerable  advantage, 
and  the  nation  would  derive  a  large  revenue  from  a  large  number  of  im 
ported  articles,  of  which  before  some  yielded  a  very  small  revenue,  and 
others  none."  That  is  the  system  adopted  in  the  American  tariff  of  1846, 


398  THEORY. 

J.  B.  Say  was  aware  of  the  inconsistency  of  these  exceptions ; 
but  the  substitute  he  offers  is  no  better.  For  in  a  nation,  the 
natural  advantages  of  which  and  its  culture  invite  to  manufac 
turing  industry,  nearly  every  branch  of  that  industry  must 
flourish  by  the  aid  of  a  persevering  and  energetic  production,  and 
it  is  ridiculous  to  suppose  that  a  great  branch  of  industry,  or  the 
whole  industry  of  a  country,  can  be  built  up  in  a  few  years.* 

in  proportions,  however,  which  Smith  would  never  have  approved ;  that 
tariff,  calculated  with  a  view  to  the  largest  possible  revenue,  embraces, 
however,  an  incidental  protection,  efficient  enough,  perhaps,  but  without 
discrimination,  to  the  degree  that  the  raw  material  often  bears  a  higher 
duty  than  the  fabric  in  which  it  is  employed.  A  consistent  free  trade  tariff 
ought  not  to  impose  duties  upon  such  articles  as  are  manufactured  in  the 
country. 

Adam  Smith  has,  after  all,  no  great  faith  in  the  future  success  of  free 
trade  in  England.  "  To  expect,  indeed,  that  freedom  of  trade  would  ever 
be  entirely  restored  in  Great  Britain,  is  as  absurd  as  to  expect  that  an 
Oceana  or  Utopia  should  ever  be  established,  in  it."  (Book  IV.,  Chap.  II., 
IVJcCulroch's  Ed.,  p.  207.)  —  [H.  R.] 

*  The  thought  of  Say  is  not  here  properly  stated.  List  has  trusted  to 
his  memory  for  the  citation.  Very  far  from  regarding  as  inconsistent  the 
two  exceptions  made  by  his  master,  Say,  in  his  Treatise  upon  Political 
Economy,  (Book  I.,  Chap.  XVII.,)  adopts  and  reproduces  them ;  he  even 
extends  the  second,  which  relates  to  products  charged  with  domestic  duties, 
so  far  as  to  approve  the  restrictions  upon  the  import  of  corn  in  England, 
on  account  of  the  excessive  burden  of  taxation  which  weighs  upon  her 
agriculture ;  taxation,  however,  which  had  not  the  special  character  in 
tended  by  Smith,  as,  for  instance,  excise  duties  upon  glass  or  paper.  This 
is  certainly  a  large  concession  to  come  from  that  quarter.  As  for  retalia 
tory  duties,  they  find  no  acceptance  with  Say :  he  condemns  them  without 
reservation. 

Say  adds,  "It  may  be  that  a  government  does  well  in  according  protec 
tion  to  an  industry  which,  though  carried  on  at  a  loss  in  the  beginning, 
promises  to  become  profitable  in  a  few  years.  There  are  circumstances 
which  may  modify  that  generally  correct  proposition,  that  every  one  is  the 
best  judge  of  the  mode  of  carrying  on  his  own  business,  and  employing 
his  own  capital.  We  have  in  France  at  this  day  the  finest  manufactories 
of  cloths  and  silks  in  the  world.  It  may  be  that  we  owe  them  to  the  wise 
encouragement  of  Colbert.  He  advanced  two  thousand  francs  to  the  manu 
facturers  in  every  establishment  kept  in  full  activity." 

Rossi,  as  we  have  already  had  occasion  to  mention,  admits  the  need  of 
protection  in  the  following  words,  which  terminate  one  of  his  lectures : — 


IMPORTS    AND    EXPORTS.  399 

In  its  perpetual  declamations  on  the  immense  advantages  of 
absolute  free  trade  and  the  disadvantages  of  the  protective  sys 
tem,  the  School  occasionally  refers  to  the  experience  of  particular 
nations  ;  —  to  Switzerland,  for  instance,  to  prove  that  industry 
may  nourish  without  protection  by  duties,  and  that  absolute 
freedom  of  international  commerce  is  the  most  solid  foundation 
of  public  prosperity.  The  fate  of  Spain  furnishes  to  people 
asking  the  aid  of  protective  duties  a  frightful  example  of 
their  disastrous  effects.  England,  duly  arranged,  as  has  been 
shown  in  a  preceding  chapter,  to  serve  as  a  model  and  object  of 
emulation  for  all  nations  having  a  manufacturing  vocation,  is 
referred  to  by  theorists  in  support  of  their  assertion,  that  the 
power  of  maintaining  manufacturing  industry  is  a  natural  gift, 
exclusively  reserved  to  certain  countries,  like  the  power  of  pro 
ducing  Burgundy  wine  ;  and  we  are  told  that  England,  above  all 
other  countries,  has  received  the  mission  of  devoting  herself  to 
manufactures  and  trade  for  the  benefit  of  all  other  nations. 
Let  us  scrutinize  more  closely  these  instances. 

And  first,  let  it  be  remarked,  that  Switzerland  is  not  a  nation, 
a  normal  nation,  a  great  nation,  but  an  assemblage  of  municipal 
ities.  Without  a  sea-coast,  confined  between  two  large  coun 
tries,  she  cannot  aspire  to  a  merchant  marine,  nor  to  direct  re 
lations  with  tropical  countries;  she  cannot  dream  of  forming 
navies,  nor  of  founding  or  acquiring  colonies. 

Switzerland  has  laid  the  foundation  of  her  present  prosperity, 
which  is,  however,  nothing  extraordinary,  as  early  as  the  time 
when  she  belonged  to  the  German  empire.  Since  then,  she  has 
been  in  a  considerable  degree  exempt  from  war ;  capital  has  been 
increased  from  generation  to  generation,  and  with  more  facility 
because  these  municipal  governments  were  no  charge  upon  the 
confederacy. 

Whilst  in  later  times,  the  rest  of  Europe  was  a  prey  to  despo 
tism,  religious  fanaticism,  war  and  revolutions,  Switzerland 

"  To  conclude,  it  is  indisputable  that  there  are  exceptions  to  the  principle 
of  freedom  of  trade  and  industry ;  exceptions,  some  of  which  have  their 
foundations  in  the  science  of  political  economy  itself,  and  others  flowing 
from  moral  and  political  considerations."  —  [H.  R.] 


400  THEORY. 

offered  an  asylum  to  all  who  fled  thither  for  the  security  of 
their  capital  and  the  employment  of  their  talents :  she  received 
from  abroad  in  this  way  important  resources.  Germany  was 
never  closed  rigorously  against  Switzerland,  whose  manufactured 
products  to  a  considerable  extent  have  found  there  at  all  times 
a  market.  Her  industry  was  moreover  not  a  national  industry, 
properly  speaking  :  it  was  especially  an  industry  of  luxury,  the 
products  of  which  were  easily  introduced  by  contraband  into  the 
neighboring  states,  or  into  distant  countries.  Besides,  the  situ 
ation  of  the  country  is  marvellously  favorable,  if  not  especially 
privileged,  for  intermediate  trade. 

The  facility  of  becoming  acquainted  with  the  languages,  the 
laws,  the  institutions,  the  civilization  of  the  three  bordering 
nations,  secures  to  the  Swiss  notable  advantages  in  trade,  and 
in  many  other  things.  Civil  and  religious  liberty,  and  the  diffu 
sion  of  knowledge,  maintained  among  them  a  life,  a  spirit  of  en 
terprise,  which,  owing  to  the  insufficiency  of  their  agricultural 
and  of  other  internal  resources,  induced  emigration  to  foreign 
parts,  where,  by  military  service,  trade  in  all  departments  of 
business,  and  in  all  sorts  of  professions,  the  men  of  Switzerland 
acquired  fortunes,  with  which  they  returned  to  their  own  country. 

If  in  this  exceptional  situation,  material  and  intellectual 
capital  has  been  accumulated  in  Switzerland,  sufficient  to  sustain 
certain  manufactures  of  articles  of  luxury  in  activity  without 
protective  duties,  it  must  not  be  concluded  that  great  nations 
placed  in  circumstances  quite  different,  might  follow  the  same 
system.  In  the  lightness  of  her  taxes,  Switzerland  enjoys  an 
advantage  that  great  nations  can  attain  but  upon  condition  lof 
being  dissolved  into  municipalities  like  Switzerland,  and  of  thus 
exposing  their  nationality  to  the  attacks  of  foreigners. 

There  is  no  doubt  that  Spain  committed  an  error  in  pro 
hibiting  the  exportation  of  her  precious  metals  when  she  was 
producing  them  in  great  abundance.  But  it  is  wrong  to  impute 
the  industrial  decline,  and  the  ruin  of  Spain,  to  the  restrictions 
placed  by  her  policy  in  the  way  of  exportation  of  manufactured 
articles.  If  Spain  had  not  exiled  the  Moors,  nor  the  Jews ;  if 
she  had  never  harbored  the  Inquisition ;  if  Charles  V.  had 


IMPORTS  AND  EXPORTS.  401 

granted  her  liberty  of  conscience  ;  if  her  priests  and  monks  had 
become  the  teachers  of  the  people ;  if  their  wealth  had  been 
secularized  or  at  least  reduced  to  proper  limits ;  if  civil  liberty 
had  been  established ;  if  the  feudal  nobility  had  been  reformed 
and  the  monarchy  regulated ;  if,  in  a  word,  Spain  had  enjoyed 
the  benefits  of  a  reformation  and  a  political  development 
analogous  to  that  of  England ;  and  if  the  same  spirit  had  pene 
trated  all  her  colonies,  then  measures  of  prohibition  or  protec 
tion  would  have  had  the  same  results  as  in  England.  This  is 
the  more  probable,  because  in  the  time  of  Charles  V.,  the 
Spaniards  were  in  all  respects  superior  to  the  English  and 
French,  and  were  surpassed  only  by  the  Dutch,  whose  indus 
trious  and  trading  genius  might  have  been  communicated  to* 
Spain  by  protective  duties,  if  Spanish  institutions  had  invited 
an  immigration  of  talents  and  capital  from  abroad,  instead  of 
sending  out  what  was  already  in  the  country. 

We  have  shown  in  the  fifth  chapter  of  Book  First  the  causes 
of  the  manufacturing  and  commercial  supremacy  in  England. 

It  is  chiefly  through  her  freedom  of  thought  and  civil  liberty,  the 
excellence  of  her  constitution  and  political  institutions  in  general, 
that  English  commercial  policy  has  exerted  such  a  favorable 
influence  in  developing  the  natural  wealth  of  the  soil  and  the 
whole  productive  power  of  the  nation.  But  who  would  dare  to 
deny  that  other  nations  had  the  power  of  securing  the  same 
degree  of  liberty?  Who  would  dare  to  maintain  that  nature 
has  refused  to  other  nations  the  means  of  success  in  manu 
facturing  industry? 

The  immense  wealth  of  England  in  coal  and  iron  has  been 
often  quoted  as  a  proof  of  her  peculiar  vocation  for  manufac 
tures.  It  is  true  that  England  has  received  from  nature  great 
favors ;  but  we  remark,  that  in  respect  of  those  matters,  nature 
has  not  left  other  nations  without  signal  marks  of  her  bounty ; 
that  frequently  the  want  of  good  routes  of  transportation  and 
travel  alone  prevent  their  deriving  all  the  advantage  possible 
from  these  favors;  that  other  countries  possess  in  abundance 
unemployed  water-power,  which  is  cheaper  than  stearn-power ; 
that  frequently  substitutes  can  be  found  for  coal  as  a  fuel,  and 
26 


402  THEORY. 

that  other  countries  besides  England  possess  inexhaustible 
resources  for  the  manufacture  of  iron. 

A  few  words,  in  closing,  upon  commercial  treaties  which  stipu 
late  reciprocal  concessions  as  to  import  duties.  The  School 
denounces  those  treaties  as  useless  and  injurious,  whilst  we  see 
in  them  an  efficient  mode  of  softening,  little  by  little,  the  rigors 
of  commercial  legislation,  and  of  gradually  conducting  nations 
to  free  trade.  It  is  true,  the  treaties  we  have  hitherto  noticed 
are  not  very  encouraging.  We  have  shown  in  preceding  chap 
ters  what  disasters  were  caused  in  Portugal  by  the  treaty  of 
Methuen,  and  in  France  by  the  treaty  of  Eden.  The  sad  results 
of  these  reciprocal  concessions  seem  to  have  inspired  the  School 
with  repugnance  for  treaties  of  commerce  in  general.  Its  prin 
ciple  of  absolute  free  trade  has  been  in  these  cases  manifestly 
contradicted  by  facts.  For,  in  uniformity  with  this  principle, 
those  treaties  ought  to  have  been  advantageous  for  both  parties 
instead  of  becoming  the  occasion  of  ruin  for  one  and  of  immense 
profit  for  the  other.  If  we  seek  the  explanation  of  effects  so 
different,  we  find,  that  in  consequence  of  those  treaties,  Portugal 
and  France  renounced,  in  favor  of  England,  the  progress  which 
they  had  already  made  in  manufactures,  as  well  as  that  which 
they  might  thereafter  make,  in  view  of  increasing  the  exporta 
tion  of  their  agricultural  products  to  England,  and  that  these 
two  countries  thus  fell  from  a  relatively  high  degree  of  culture 
to  an  inferior  condition.  Hence  it  is  plain  that  a  nation  which, 
by  treaties  of  commerce,  sacrifices  its  manufacturing  industry  to 
foreign  competition,  and  becomes  obliged  to  remain  forever  in 
the  humble  condition  of  a  merely  agricultural  nation,  is  guilty 
of  a  suicidal  folly.  But  it  by  no  means  follows  that  a  treaty 
intended  to  encourage  a  reciprocal  exchange  of  agricultural 
products  and  raw  materials,  or  a  reciprocal  exchange  of  manu 
factured  products,  is  injurious  or  impolitic. 

We  have  already  established  that  free  trade  in  agricultural 
products  and  raw  materials  is  useful  for  nations  of  every  degree 
of  culture ;  accordingly,  a  treaty  which  lessens  or  suppresses  the 
impediments  to  this  trade  must  be  advantageous  to  both  con 
tracting  parties.  Such  would  be,  for  instance,  a  treaty  between 


IMPORTS  AND  EXPORTS.  403 

France  and  England,  which  would  facilitate  the  reciprocal 
exchange  of  wines  and  brandies  for  crude  iron  and  coal,  or  a 
treaty  between  France  and  Germany,  which  would  facilitate  the 
reciprocal  exchange  of  wine,  oil,  and  dried  fruits,  for  corn,  wood, 
and  cattle. 

From  our  previous  deductions,  it  results  that  protection  con 
tributes  to  the  prosperity  of  a  nation,  so  far  as  it  corresponds  to 
the  degree  of  its  industrial  training ;  that  any  excess  of  protec 
tion  is  injurious ;  that  nations  can  only  attain  gradually  to  per 
fection  in  manufactures.  Two  nations  in  different  degrees  of 
industrial  education,  can,  with  equal  advantage,  enter  into 
treaties  or  reciprocal  agreements  for  the  exchange  of  dif 
ferent  manufactured  products.  The  less  advanced  nations, 
unable  to  manufacture  with  profit  fine  cotton  or  silk  goods,  for 
instance,  can  nevertheless  furnish  the  more  advanced  with  a  part 
of  its  supply  of  common  commodities. 

Such  treaties  are  still  more  eligible,  and  of  a  nature  to 
produce  still  better  results  between  nations  almost  in  the  same 
degree  of  industrial  advancement;  between  which,  of  course, 
competition,  instead  of  being  restrictive  or  paralyzing,  and  af 
fording  to  one  of  the  parties  a  monopoly,  has  only  the  effect,  as 
in  internal  trade,  of  exciting  emulation  and  stimulating  improve 
ments  and  reduction  in  prices.  -  Such  is  the  case,  for  the  most 
part,  among  the  nations  of  the  continent.  France,  Austria,  and 
the  German  Customs-Union,  for  instance,  might  look  for  good 
results  from  moderation  in  their  duties,  and  even  as  between 
those  countries  and  Russia  mutual  concessions  might  be  made  for 
the  common  advantage.  What  all  have  at  present  most  to  fear 
is  the  industrial  supremacy  of  England. 

From  this  point  of  view,  the  British  supremacy  in  manufactures, 
commerce,  navigation,  civil  and  naval,  and  in  colonies,  seems 
actually  the  greatest  of  all  obstacles  to  a  close  union  of  nations. 
It  must  be  acknowledged,  however,  whilst  struggling  to  secure  this 
supremacy,  Great  Britain  has  increased  immensely  the  productive 
power  of  mankind,  and  that  she  is  still  daily  increasing  it.* 

*  This  terminates  List's  exposition  of  his  theory.  Whoever  has  followed 
the  movement  of  economical  ideas,  the  discussions  of  the  journals,  and  the 


404  THEORY. 

public  debates  in  Germany  during  late  years,  knows  the  powerful  influence 
this  theory  has  exercised,  and  still  exercises  beyond  the  Rhine.  One  of 
the  disciples  of  List,  Theodore  Toegel,  after  having  conducted  during  some 
time  at  Augsburg  the  Zollvereinblatt,  founded  by  his  illustrious  master, 
edits  now  at  Frankfort-on-the-Main  the  Vereinsblatt,  or  the  Journal  of  the 
German  Society  for  the  defence  of  national  labor.  Another,  Gustavus 
Hcefken,  directs  at  Vienna  The  Austria,  under  the  auspices  of  the  Austrian 
administration.  Placed  in  different  centres,  they  sustain  each  in  a  different 
way  the  same  doctrine.  The  first  has  labored  to  complete  the  protective 
system  of  the  German  association ;  the  other  to  reform  that  of  Austria  by 
retrenching  her  prohibitions.  The  commercial  unity  of  central  Europe  is 
the  common  object  of  both.  We  take  the  following  passage  from  a  late 
number  of  Hoefkin's  Journal: — "From  the  time  when  Krause  of  Koenigs- 
berg  inoculated  the  Prussian  administration  with  the  doctrines  of  Adam 
Smith,  German  political  economy  has  made  great  progress ;  and,  among 
our  professors  of  renown,  there  is  not  one  from  Rau  to  Hermann  and  to 
Hildebrand,  who  walks  still  in  the  beaten  path  of  abstraction,  and  who 
does  not  openly  support  our  intelligent  system  of  protection  and  recipro 
city,  such  as  the  circumstances  require."  This  economical  revolution  is  the 
work  of  List. 

Among  the  opponents  of  the  National  System,  I  will  mention  two,  Brlig- 
geman  and  Doeniges  ;  it  is  worthy  of  remark  that  both  had  been  for  a  time 
under  the  standard  of  List :  both  changed  their  front. 

The  chief  accusation  brought  by  the  former  against  List  in  a  volume 
published  in  1845,  with  the  title  Of  the  German  Zoll-verein  and  the  Protective 
System,  is  that  of  plagiarism.  According  to  him,  List  has  merely  reproduced 
in  a  worse  form,  the  ideas  of  a  fellow-citizen,  one  Adam  Muller,  with 
whom  he  had  held  conversations  while  at  Vienna ;  ideas,  however,  which, 
at  the  best,  under  the  pen  of  their  author,  had  never  attained  any  success 
or  notoriety ;  it  has  been  already  remarked  that  List  had  been  accused  of 
borrowing  from  an  author  whose  name  he  had  never  heard,  and  whose 
works  he  had  never  seen.  Brliggeman  further  declares  that  there  is  no 
point  of  view  more  elevated  than  that  of  Adam  Smith,  that  the  science 
ought  to  see  the  nation  and  not  the  individual ;  that  absolute  freedom  of 
trade  at  the  present  is  a  chimera ;  and  that,  though  preferring  other  mea 
sures  for  the  encouragement  of  industry  of  a  country,  he  does  not  wholly 
reject  protecting  duties. 

Doeniges  published,  in  1847,  a  work  with  the  title,  The  System  of  Free 
Trade  and  that  of  Protective  Duties,  in  which  he  offers  the  usual  arguments 
in  favor  of  free  trade,  but  employs  them  with  much  moderation.  Early 
devoted  to  historical  studies,  he  formed,  he  says,  the  habit  of  regarding 
questions  from  their  historical  aspect.  He  condemns  the  doctrine  of  unli 
mited  free  trade  as  held  by  the  physiocrats,  and  is  indignant  at  the  jour 
nalists  who  reproach  him  for  crediting  the  exaggerations  of  Cobden.  We 


IMPORTS    AND    EXPORTS.  405 

give  his  own  words : — "  The  imposition  of  a  protecting  duty  or  a  moderate 
increase  of  existing  duties  is  admissible,  because  the  preservation  of  a  great 
and  fruitful  industry  may  have  durable  advantages  far  surpassing  the 
transient  inconvenience  of  an  increase  in  the  price  of  merchandise." 

This  work  of  Doeniges  has  provoked  a  reply  from  a  professor  who  enjoys 
high  consideration  in  Germany,  Hermann  of  Munich.  The  following 
passage  of  his  reply  gives  the  point  of  view  in  which  this  subject  is  re 
garded  by  the  Bavarian  professor : — "  From  the  moment  when  the  national 
sentiment  has  attained  maturity,  the  people  of  a  nation  wish,  as  far  as 
practicable,  to  be  independent,  and  to  elevate  themselves  to  the  level  of 
other  independent  nations.  Our  fellow-citizen,  who  bears  the  same  public 
charges  as  we,  may  claim  a  preference  in  the  market  over  the  citizen  of 
another  country.  The  complete  development  of  the  productive  powers  of  a 
country  exacts  that  those  branches  of  industry  for  which  the  country  is 
perfectly  prepared  should  be  protected,  because  individuals  will  otherwise 
be  unwilling  to  encounter  the  competition  of  countries  which  have  preceded 
them  in  those  departments ;  in  fact,  no  nation  can,  without  incurring  the 
contempt  of  the  world,  besides  heavy  losses,  endure  a  retrograde  movement 
and  inequality  in  its  commercial  relations.  Modern  history  attests,  in  many 
instances,  the  justness  of  these  remarks.  The  degree  of  protection  and 
preference  accorded  to  the  inhabitant  of  a  country,  the  measures  adopted 
by  States  to  assure  their  independence  in  reference  to  other  States,  have 
varied.  The  parent  idea  is  everywhere  the  same,  and  its  influence  was 
felt  in  no  small  degree  before  the  nature  of  international  commerce  was 
well  understood.  The  mercantile  system  was  but  the  first  step  towards  its 
scientific  explanation.  It  has  been  fully  shown  that  this  system  was  de 
fective,  that  it  wanted  a  good  analysis  of  commerce,  and  that  its  inaccurate 
conceptions  had  misled  governments,  and  induced  them  to  adopt  false 
measures." 

"  But  the  idea  of  the  completest  development  possible  of  the  interior 
economy  of  a  nation,  and  of  entire  equality  in  relations  with  other  coun 
tries,  the  mercantile  system  did  not  conceive  nor  understand ;  it  attempted 
only  to  explain  and  elaborate.  The  refutation  which  it  has  met  has  not 
taken  away  the  necessity  of  national  independence  ;  the  modern  theory  has 
not  succeeded  in  suppressing  it.  This  necessity  has  continued  to  be  the 
rule,  until  now,  of  the  commercial  legislation  of  all  independent  States. 
It  is  for  science  to  bring  this  subject  to  its  proper  limits,  and  to  ascertain 
to  what  extent  a  nation  can  be  economically  independent  without  inflicting 
any  undue  injury  upon  the  economy  of  individuals,  and  how  the  free  ac 
tion  of  individuals  can  be  reconciled  with  the  exigencies  of  national  senti 
ment  and  national  honor." 

Rau,  in  the  last  edition  of  his  Treatise  upon  Political  Economy,  (Vol.  I.,) 
erroneously  reproaches  List  with  placing  manufacturing  industry  above 
agriculture.  It  is  the  degree  of  civilization  in  which  manufactures  flourish 


406  THEORY. 

at  the  side  of  agriculture  that  List  prefers  to  that  in  which  agriculture 
exists  alone  and  in  an  imperfect  state;  but  Rau  admits  that  in  certain 
cases  and  in  certain  conditions,  theory  justifies  the  protection  of  the  labor 
of  a  country. 

Baron  Reden,  who  has  published  numerous  and  important  works  upon 
statistics  and  social  economy,  and  who,  we  remark  in  passing,  by  the  un 
wearied  cares  of  twenty  years,  has  amassed  the  most  valuable  collection 
of  statistical  works  and  documents  which  exist  in  Europe,  was,  it  is  known, 
one  of  the  leaders  of  the  protectionists  in  the  parliament  of  Frankfort-on- 
the-Main. 

Among  the  followers  of  List  in  Germany,  I  cannot  omit  A.  Christ,  author 
of  a  work  published  in  1851,  under  the  title,  Of  the  actual  state  of  the  ques 
tion  of  protective  duties.  —  [H.  R.J 


BOOK  III.  — SYSTEMS. 

CHAPTER  I. 
THE  ITALIAN  ECONOMISTS. 

ITALY  has  preceded  all  modern  nations  in  the  theory  as  well 
as  in  the  practice  of  political  economy.  Count  Pecchio  has 
published  a  conscientious  history  of  that  branch  of  Italian  lite 
rature,  the  only  defect  of  which  is  its  being  too  servilely  faithful 
to  the  theory  of  the  School,  and  its  not  exhibiting  fully  the 
principal  causes  of  the  ruin  of  industry  in  Italy,  that  is,  the 
want  of  unity  in  the  great  nations  formed  under  the  influences 
of  hereditary  monarchy,  the  domination  of  the  Church  of 
Rome,  and  the  downfall  of  liberty  in  the  republics  and  in  the 
cities. 

The  first  special  work  on  Political  Economy  written  in  Italy 
is  that  of  Antonio  Serra,  of  Naples,  on  the  means  of  attracting 
gold  and  silver  into  a  country. 

Say  and  McCulloch  seem  not  to  have  read  more  of  this  book 
than  the  title;  both  turn  from  it  disdainfully,  observing  that 
the  author  treats  only  of  money,  and  that  he  has  committed  the 
error  of  regarding  as  riches  only  the  precious  metals.  If  they 
had  read  a  little  farther,  if  they  had  studied  it  ever  so  little, 
they  might  have  found  there  some  useful  lessons.  Antonio 
Serra,  though  guilty  of  the  error  of  regarding  abundance  of 
gold  and  silver  as  a  sign  of  wealth,  has,  however,  very  clear 
ideas  as  to  the  origin  of  riches.  He  places  in  the  first  rank,  it 
is  true,  mines,  as  being  the  direct  sources  of  the  precious  metals, 
but  he  does  every  justice  also  to  the  indirect  means  by  which 
they  are  obtained.  Agriculture,  industry,  and  commerce,  are, 

(407) 


408  SYSTEMS. 

in  his  eyes,  the  principal  sources  of  national  wealth.  A  fertile 
soil  is  a  true  source  of  prosperity,  but  manufactures  are  a  still 
more  fruitful  source,  for  different  reasons,  but  especially  on 
account  of  the  vast  commerce  to  which  they  give  rise.  The 
fecundity  of  these  sources  depends  upon  the  qualifications  of  the 
people ;  for  instance,  upon  their  industry,  their  activity,  enter 
prise,  economy ;  upon  their  natural  and  local  advantages ;  upon 
the  favorable  situation  of  its  cities  for  maritime  commerce. 
Above  all  these  causes,  Serra  places  the  form  of  government, 
public  order,  civil  liberty,  political  security,  stability  of  laws. 
"A  country,"  says  he,  "can  never  prosper  if  each  new  ruler 
enacts  new  laws.  It  is,  perhaps,  for  that  reason  that  the  States 
of  the  Holy  Father  are  less  flourishing  than  others,  the  govern 
ment  and  legislation  of  which  are  more  stable.  See  the  influ 
ence  which  in  Venice  a  continuance  of  the  same  policy  for 
centuries  has  had  upon  public  prosperity."  Such  is  the  sub 
stance  of  a  system  of  political  economy,  which  though  it  appear 
to  have  no  higher  view  than  the  acquisition  of  the  precious 
metals,  is  distinguished  as  a  whole  by  its  consonance  with 
nature  and  good  sense.  The  work  of  J.  B.  Say,  which,  we 
admit,  develops  economical  notions  of  which  Antonio  Serra  had 
no  idea,  is  very  inferior  to  that  of  Serra  in  the  principal  topics, 
and  especially  in  the  exact  appreciation  of  that  policy  which 
favors  the  wealth  of  nations.  If  Say  had  studied  Serra  instead 
of  slighting  him,  he  might  have  hesitated  to  maintain,  as  he 
does,  in  the  first  page  of  his  Treatise  upon  Political  Economy, 
that  political  economy  has  nothing  to  do  with  the  constitution  of 
states ;  that  under  all  forms  of  government,  nations  have  grown 
rich  and  have  become  impoverished,  and  that  it  is  only  impor 
tant  for  a  nation  that  its  government  be  well  administered. 

We  are  far  from  being  inclined  to  contend  for  the  absolute 
superiority  of  any  one  form  of  government  over  all  others.  It 
suffices  but  to  cast  a  glance  at  the  States  of  South  America,  to 
be  convinced  that  democratic  rule  in  nations  not  quite  ripe  for 
it,  may  produce  results  decidedly  retrograde  in  the  matter 
of  their  prosperity. 

A  glance  at  Russia  suffices  to  demonstrate  that  nations  of  an 


ITALIAN    ECONOMISTS.  409 

inferior  degree  of  culture,  may,  under  an  absolute  monarchy, 
achieve  a  very  remarkable  material  progress.  But  this,  by  no 
means,  proves  that  under  any  form  of  government,  nations  may 
grow  rich  and  attain  the  highest  degree  of  prosperity.  On  the 
contrary,  history  teaches  that  the  degree  of  public  prosperity, 
marked  by  manufactures  and  a  flourishing  trade,  can  only  be 
reached  in  countries  of  which  the  political  institutions,  whether 
democratic,  aristocratic,  or  monarchial,  fully  guarantee  to  the 
people  liberty  of  person  and  security  of  property,  and  insure  an 
active  and  energetic  administration  of  social  interests,  with  per 
severance  in  a  wise  policy.  For  in  an  advanced  state  of  civili 
zation,  it  is  not  of  so  much  concern  that  a  government  be  well 
administered  for  a  time  as  that  it  be  constantly  and  uniformly  well 
administered ;  and  in  such  manner,  that  a  new  administration 
shall  not  destroy  the  good  done  by  its  predecessors ;  that  such 
a  government  as  that  of  Colbert  for  instance,  of  thirty  years' 
standing,  shall  not  be  followed  by  a  revocation  of  the  Edict  of 
Nantes ;  that  for  ages  one  and  the  same  good  system  is  perse 
vered  in  for  one  and  the  same  good  end. 

The  political  institutions  in  which  the  interests  of  the  people 
are  represented,  and  not  an  absolute  government  in  which  the 
administration  changes  with  the  person  of  the  monarch,  are 
those  only,  as  Antonio  Serra  remarks,  which  afford  the  required 
stability  of  administration. 

There  exist,  however,  degrees  of  culture,  when  an  absolute 
government  may  be,  and  indeed  generally  is,  much  more  favor 
able  to  the  material  and  moral  progress  of  a  country  than  a 
constitutional  government ;  we  mean  the  period  of  slavery, 
servitude,  barbarism,  superstition,  national  sub-division  and  ex 
clusive  privileges.  For  in  such  cases  a  constitution  favors  the 
continuance,  not  only  of  what  are  national  advantages,  but  also 
the  continued  domination  of  abuses ;  whilst  the  interest  of  an 
absolute  government  is  often  to  extirpate  abuses,  and  prepare 
the  way  for  some  monarch  in  the  succession,  of  such  energy 
and  intelligence  as  may  in  one  reign  carry  the  nation  centuries 
ahead,  and  open  for  it  an  indefinite  career  of  independence  and 
progress. 


410  SYSTEMS. 

It  is  by  the  aid,  then,  of  a  common-place,  true  only  in  a  re 
lative  sense,  that  J.  B.  Say  endeavors  to  distinguish  his  doctrine 
from  politics.*  Of  course  it  is  important  above  all,  that  a 
government  be  well  administered,  but  the  goodness  of  the  ad 
ministration  depends  not  a  little  on  the  form  of  government ; 
and  the  best  form  of  government  is  evidently  that  which  best 
responds  to  the  moral  and  material  condition  of  the  country 
with  a  view  to  its  future  welfare.  Nations  have  advanced  under 
all  forms  of  government,  but  they  have  reached  a  high  degree  of 
economical  development,  only  where  the  form  of  government 
secured  a  high  degree  of  personal  liberty  and  public  power, 
stability  in  legislation,  in  policy,  and  good  institutions  in 
general. 

Antonio  Serra  saw  things  as  they  are,  and  not  through  the 
spectacles  of  a  preconceived  system,  or  of  a  single  principle 
which  he  is  endeavoring  to  justify  and  establish.  He  compares 
the  situation  of  the  different  States  of  Italy,  and  finds  the 
greatest  wealth  where  he  finds  the  most  active  commerce; 
where  he  finds  an  advanced  manufacturing  industry,  and  where 
civil  liberty  is  most  fully  enjoyed. 

The  opinion  of  Beccaria  was  biassed  by  the  false  maxims  of 
the  physiocrats.  His  works  prove  that  he  discovered,  either 
before  Adam  Smith,  or  about  the  same  time,  the  principle  of  the 
division  of  labor,  or  he  may  have  found  it  in  Aristotle;  he 
carries  it  even  farther  than  Adam  Smith,  for  he  does  not  limit 
it  to  the  sub-division  of  the  work  in  any  particular  branch  of 
manufacture ;  but  he  shows  how  the  distribution  of  the  various 
portions  of  society,  in  the  pursuit  of  different  branches  of  in 
dustry,  tends  to  public  prosperity.  He  does  not  hestitate,  how 
ever,  to  maintain  with  the  physiocrats,  that  manufacturers  are 
not  productive. 

*  It  is  a  fatal  error  in  the  Political  Economy  of  the  School  of  Say,  that 
it  abjures  politics.  If  the  object  of  both  is  to  promote  human  well-being 
in  society,  and  if  the  two  subjects  touch  at  every  point,  it  is  impossible  to 
develop  either  without  running  into  the  other.  It  is  folly  to  say  that  a  go 
vernment  ought  not,  by  all  its  power  and  wisdom,  to  aid  the  economical  de 
velopment  of  a  country.  It  is  rather  one  of  its  highest  duties.  —  [S.  C.] 


THE    INDUSTRIAL    SYSTEM.  411 

Nothing  can  be  more  narrow  than  the  views  of  the  great  pub 
licist  Filangieri.  Imbued  with  a  false  cosmopolitism,  he  thinks 
that  England  by  her  commercial  restrictions,  has  only  given  a 
premium  to  smugglers,  and  thus  diminished  her  commerce. 

Verri,  who,  as  a  practical  statesman,  could  not  err  in  this  re 
spect,  admits  that  it  is  necessary  to  protect  indigenous  industry 
against  foreign  competition ;  but  he  does  not  see,  or  did  not 
venture  to  say,  that  such  policy  supposes  a  large  territory  and 
unity  of  institutions. 


CHAPTER  II. 

THE  INDUSTKIAL  SYSTEM,  (IMPROPERLY  CALLED  THE  MER 
CANTILE  SYSTEM). 

WHEN  great  nations  are  formed  by  a  union  of  lesser  nations, 
under  an  hereditary  monarchy,  and  by  a  systematic  centraliza 
tion  of  public  power,  manufactures,  commerce,  and  navigation, 
that  is,  wealth  with  maritime  power,  find  their  safest  retreat 
and  largest  growth  in  municipal  republics  or  confederations  of 
such  republics.  In  proportion,  however,  as  the  institutions 
of  such  great  nations  become  developed,  the  necessity  of  natu 
ralizing  the  essential  elements  of  power  and  wealth  becomes 
better  understood. 

Perceiving  that  these  could  only  take  root  and  flourish  in  the 
soil  of  freedom,  royal  authority  favored  municipal  liberty  as 
well  as  corporations ;  in  which  were  found  a  new  point  of  sup 
port  against  feudal  aristocracy,  at  once  jealous  of  its  power  and 
hostile  to  national  unity.  These  means,  however,  were  found  to 
be  insufficient ;  the  advantages  which  private  individuals  enjoyed 
in  free  cities  or  republics,  were  more  considerable  than  any 
which  monarchs  could  or  dared  to  bestow  upon  the  inhabitants 
of  their  municipalities.  Under  the  rule  of  free  competition  it  is 
very  difficult,  if  not  impossible,  for  a  country  which  has  hereto- 


412  SYSTEMS. 

fore  been  chiefly  engaged  in  agriculture,  to  supersede  those  who 
for  centuries  have  been  active  manufacturers,  merchants  or  navi 
gators  ;  finally,  in  great  monarchies,  feudal  institutions  proved 
to  be  an  obstacle  to  the  development  of  agriculture ;  and 
consequently  to  the  progress  of  manufactures.  The  natural 
course  of  things  has  thus  induced  royal  governments  to  restrict 
the  import  of  foreign  products,  to  put  a  check  upon  all  foreign 
trade  and  shipping,  and  to  favor  domestic  manufactures,  com 
merce  and  shipping. 

Hitherto,  public  revenue  was  derived  chiefly  from  duties  upon 
exports  of  raw  materials ;  they  began  now  to  be  levied  chiefly 
upon  imports  of  manufactured  products.  This  policy  induced 
the  merchants,  seamen,  and  manufacturers  of  cities  and  coun 
tries  hitherto  more  advanced  in  the  processes  of  industry,  to  take 
up  their  residence  in  those  great  monarchies,  carrying  their  skill 
and  capital  where  they  found  the  greatest  encouragement,  and 
the  surest  support.  The  birth  of  industry  was  quickly  followed 
by  that  of  liberty.  The  feudal  aristocracy  was  compelled  for  its 
own  sake  to  make  concessions  to  industrial  and  trading  as  well 
as  to  rural  interests.  Hence  a  progress  in  agriculture,  which  re 
acted  favorably  in  its  turn  upon  the  other  chief  elements  of 
national  riches.  By  the  aid  of  this  system  and  of  the  reforma 
tion,  England  grew  from  century  to  century,  in  productive  and 
political  power,  and  in  liberty.  In  France  this  system  was  in 
operation  for  some  time  with  success ;  but  the  experiment  was 
checked  there  for  want  of  a  reform  in  feudal  institutions,  in  the 
church,  and  in  the  monarchy.  The  Polish  nation  perished 
because  its  elective  monarchy  lacked  inherent  vigor;  it  had 
neither  sufficient  power  nor  stability  to  raise  up  a  strong  middle 
class,  and  to  reform  its  feudal  institutions. 

Under  the  influence  of  such  a  policy,  in  place  of  a  commer 
cial  and  manufacturing  city,  and  of  an  agricultural  province 
often  without  political  ties,  a  nation  appears,  constituting  an 
harmonious  and  complete  whole  in  itself;  a  nation  in  which  the 
discrepancies  which  had  existed  between  monarchy,  feudal  aris 
tocracy,  and  plain  citizenship,  were  brought  into  satisfactory 
concord ;  whilst,  on  the  other  hand,  agriculture,  manufacturing 


INDUSTRIAL    SYSTEM.  413 

industry  and  commerce,  were  maintained  in  the  most  intimate 
harmony.  This  was  a  social  state  infinitely  more  perfect  than 
the  preceding ;  for  manufacturing  industry,  heretofore  confined 
within  the  narrow  limits  of  cities,  was  extended  over  vast  terri 
tories,  all  the  resources  of  which  were  at  its  disposal ;  the  divi 
sion  of  lahor,  and  the  concentration  of  productive  power  in 
the  different  branches  of  manufacturing  industry  and  agricul 
ture,  were  realized  upon  a  much  larger  scale  ;  the  numerous  class 
of  agriculturists  was  politically  and  commercially  brought  into 
contact  with  manufacturers  and  merchants,  and  thus  a  perpetual 
peace  was  established  between  them ;  the  reciprocal  action  of 
agriculture  and  manufacturing  industry  was  for  ever  secured ; 
and  lastly,  agriculturists  were  admitted  to  all  the  benefits 
which  accompany  manufactures  and  commerce.  A  country  at 
once  agricultural,  manufacturing,  and  commercial,  is  like  a 
city  embracing  the  whole  of  a  nation,  or  a  territory  enjoying  all 
the  advantage  of  a  city. 

Whilst  material  production  increases  by  virtue  of  such  con 
centration,  moral  power  cannot  fail  to  be  developed,  political 
institutions  to  be  improved,  public  income,  population,  and  the 
means  of  defence  to  be  increased.  The  nation,  therefore,  which 
most  fully  realizes  a  condition  at  once  agricultural,  manufactu 
ring,  and  commercial,  is  that  which  in  our  day  will  be  found 
taking  the  lead  among  nations. 

The  industrial  system  was  not  first  brought  before  the  world 
in  books ;  it  was  not  imagined  by  authors  or  professors,  it  was 
merely  and  simply  the  growth  of  national  experience  down  to  the 
time  of  Stewart,  who  sketched  its  main  features  in  his  works  on 
political  economy,  in  great  part,  according  to  the  then  settled 
policy  of  England,  as  Antonio  Serra  had  previously  drawn  the 
elements  of  his  system  from  the  history  of  Venice.  Stewart's  work 
is  not  properly  a  scientific  book.  Money,  banks,  the  circulation 
of  paper,  commercial  revulsions,  the  balance  of  trade  and  popu 
lation,  occupy  the  greatest  part  of  it.  His  development  of 
those  subjects  is  still  instructive  in  more  than  one  respect ;  but 
the  topics  are  presented  without  order  or  skill,  the  same  idea  being 
repeated  sometimes  as  often  as  ten  times.  The  other  topics  of 
political  economy  are  superficially  treated  or  wholly  omitted. 


414  SYSTEMS. 

Neither  productive  power  nor  the  elements  of  prices  are  thoroughly 
examined.  The  author,  in  all  he  says,  keeps  ever  in  view  the 
experience  and  the  position  of  England.  In  short,  his  book  has 
all  the  merits  and  all  the  defects  of  the  English  system  and  the 
policy  of  Colbert. 

We  present  the  following  summary  of  the  merits  of  the  industrial 
system  in  comparison  with  the  systems  which  have  succeeded  it : — 

1st.  It  assumes  the  importance  of  manufactures  and  their 
influence  on  the  agriculture,  commerce,  and  navigation  of  a 
country,  and  frankly  acknowledges  their  importance. 

2d.  It  aims,  in  general,  at  the  best  mode  of  establishing  manu 
facturing  industry  in  a  nation  properly  situated  for  that  purpose.* 

3d.  It  takes  the  idea  of  a  nation  as  its  starting  point,  and 
treating  nations  as  unities,  keeps  the  attention  constantly  fixed 
upon  national  interests.  We  give  now  the  principal  points  in 
which  the  system  is  deficient : — 

1st.  It  furnishes  in  -general  no  exact  notion  of  the  principle 
of  the  industrial  education  of  a  people,  nor  of  the  conditions  of 
its  application. 

2d.  It  excites,  consequently,  among  people  who  live  in  climates 
ill-suited  for  manufactures,  or  in  States  too  small  or  unfavorably 
situated,  an  awkward,  untimely  imitation  of  the  protective  system. 

3d.  To  the  detriment  of  agriculture  it  extends  protection  to 

*  "  In  order  to  promote  industry,  a  statesman  must  act  as  well  as  permit 
and  protect.  Could  ever  the  woollen  manufacture  have  been  introduced 
into  France  from  the  consideration  of  the  great  advantage  England  had 
drawn  from  it,  if  the  king  had  not  undertaken  the  support  of  it  by  grant 
ing  many  privileges  to  the  undertakers,  and  by  laying  strict  prohibitions 
on  all  foreign  cloths  ?  Is  there  any  other  way  of  establishing  a  new  manu 
facture  anywhere  ?" — Stewart's  Pol.  Econ.,  Book  I.  —  [List.] 

So  Russian  statesmen  have,  for  thirty  years,  advised  and  acted.  That 
government  has  specially  assisted,  by  loans  and  otherwise,  various  branches 
of  manufacture,  and  has  completely  succeeded  in  domesticating  them  to 
the  unspeakable  advantage  of  the  country.  Manufactures  of  cotton,  iron, 
woollens,  silks,  and  many  others,  are  now  flourishing  in  that  country  under 
this  fostering  policy.  The  principle  is  not  unknown  in  this  country.  The 
State  of  Virginia  subscribes  three-fifths  of  the  stock  of  the  turnpikes,  rail 
roads,  and  canals,  undertaken  by  its  citizens ;  that  is,  it  furnishes  more 
than  half  the  capital  of  certain  enterprises  in  which  the  people  engage  for 
their  own  benefit.  —  [S.  C.j 


INDUSTRIAL    SYSTEM.  415 

raw  materials,  though  agriculture  be  sufficiently  protected  by 
the  nature  of  things  against  foreign  competition. 

4th.  To  the  detriment  of  agriculture  and  against  all  justice, 
it  favors  manufactures  by  restraining  the  exportation  of  raw 
materials. 

5th.  It  does  not  teach  the  nation  which  has  reached  manu 
facturing  and  commercial  supremacy  the  policy  of  opening  its 
markets  to  free  competition  to  preserve  its  manufacturers  and 
merchants  from  inaction  and  careless  security. 

6th.  In  the  exclusive  pursuit  of  its  special  policy,  it  disregards 
the  international  relations  of  people ;  it  induces  governments  to 
resort  to  prohibition  where  protection  would  suffice,  or  to  impose 
prohibitive  duties  where  moderate  duties  would  answer  better. 

7th.  Finally,  by  the  complete  oblivion  of  the  cosmopolite 
principle,  it  loses  sight  of  a  closer  union  of  nations  at  a  future 
time;  of  the  establishment  of  perpetual  peace;  and  of  the 
general  freedom  of  trade,  —  objects  at  which  all  nations  should 
aim,  and  to  which  they  must  continually  approximate.* 

*  The  French  translator  adds  here  this  remark :  — "  Is  this  reproach 
merited  ?  Is  it  true  that  the  policy  of  this  system  is  exclusively  directed 
towards  the  means  of  restriction,  and  that  it  overlooks  the  end,  which  is 
liberty?  This  cannot  at  least  be  said  of  the  protective  system  of  France, 
long  as  it  has  been  in  operation.  De  Saint  Crieq  did  not  regard  protection 
as  perpetual ;  in  offering  the  projet  of  the  tariff  of  1829,  he  announced  dis 
tinctly  that  it  was  proper  to  tend  towards  commercial  liberty;  and  it  is  right 
to  add  that  such  has  been  always  the  doctrine  of  the  French  administration 
since  that  time." 

The  concession  here  implied  is  too  large.  It  admits  the  policy  of  free 
trade  to  be  sound  in  theory.  The  true  element  should  never  be  forgotten — 
the  best  interests  of  the  people.  "We  must  not  shape  our  present  policy  with 
a  view  to  ultimate  free  trade.  The  inquiry  being  ever,  what  is  best  for  the 
whole  population,  we  must  adopt  at  once  what  is  best  now,  whether  free 
trade  or  restriction.  It  must  never  be  admitted  that  the  policy  of  a  people 
can  be  developed  from  free  trade ;  and  it  must  never  be  lost  sight  of,  that 
free  trade  among  merchants  may  be  contemporaneous  with  the  most  de 
graded  condition  of  the  people.  The  poorer  the  laborers,  the  lower  the 
wages  ;  the  cheaper  the  goods,  the  greater  the  trade.  Very  great  trade  is 
very  far  from  being  the  proof  of  a  proper  degree  of  comfort  among  the 
masses  who  furnish  the  commodities  of  trade.  The  greatest  producers  in 
the  world  may  be  those  who  are  badly  fed,  badly  clothed,  and  badly  edu 
cated,  or  not  educated  at  all.  —  [S.  C.] 


416  SYSTEMS. 

Modern  Schools  have  unjustly  reproached  this  system  with 
recognizing  no  other  wealth  than  the  precious  metals,  whilst 
these  are  merely  articles  of  commerce  in  common  with  others ; 
and  with  holding  the  doctrine  of  selling  to  other  countries  as 
much  as  possible  and  of  purchasing  from  other  countries  as 
little  as  possible. 

The  first  reproach  cannot  be  maintained  against  the  adminis 
tration  of  Colbert ;  nor  can  it  be  urged  that  England,  since  the 
time  of  George  L,  has  placed  too  high  an  estimate  upon  the 
policy  of  importing  the  precious  metals.  To  encourage  manu 
factures,  shipping,  and  foreign  commerce,  such  were  the  objects 
of  their  commercial  policy,  a  policy  not  without  its  defects,  but 
which,  on  the  whole,  produced  important  results.  We  have  seen 
that  since  the  treaty  of  Methuen.  England  annually  exported 
to  the  East  Indies  large  quantities  of  the  precious  metals  with 
out  its  being  regarded  as  a  public  evil. 

When  the  ministers  of  George  I.  prohibited  in  1721  the 
importation  of  cotton  fabrics  and  silk  goods  from  India,  they 
did  not  say  that  the  policy  of  a  nation  consisted  in  selling  to 
foreigners  as  much  as  possible  and  in  purchasing  from  them  as 
little  as  possible ;  this  absurdity  was  added  to  the  industrial 
system  by  a  later  School.  They  merely  declared  that  a  nation 
could  arrive  at  power  and  wealth  only  by  exporting  its  manufac 
tured  products  and  importing  raw  materials  and  food.  England 
has  hitherto  steadily  pursued  this  line  of  policy,  and  by  it  she 
has  attained  her  present  power  and  wealth ;  it  is  the  only  safe 
policy  for  a  country  of  ancient  civilization  and  of  well-advanced 
agriculture.* 

*  Whatever  the  errors  and  absurdities  of  the  mercantile  system,  as  prac 
tised  and  developed  by  the  statesmen  of  England  during  the  past  two 
centuries,  they  bear  no  comparison  with  the  errors  and  absurdities  which 
the  future  historian  of  political  economy  will  find  in  the  theory  now  in 
vogue,  as  developed  by  authors  and  professors  of  political  economy.  Both 
these  systems  exaggerate  the  importance  of  commerce,  and  make  it  a  chief 
agent  in  the  production  of  wealth.  They  forget  that  commerce  is  a  mere 
handmaid  of  industry,  the  agent  for  the  distribution  of  the  products  of 
industry.  The  mercantile  system  has  this  advantage  over  the  modern 
School,  that  it  employed  commercial  restrictions  as  a  mode  of  protecting 


AGRICULTURAL    SYSTEM.  417 


CHAPTER   III. 

THE  SCHOOL  OF  THE  PHYSIOCRATS ;  OR  THE  AGRICULTURAL 

SYSTEM. 

IF  the  wise  efforts  of  Colbert  had  not  been  foiled,  if  the  revoca 
tion  of  the  Edict  of  Nantes,  the  pride  of  Louis  XIV.  and  his 
passion  for  glory,  if  the  debauchery  and  dissipations  of  his 
successor  had  not  destroyed  the  germs  planted  by  Colbert,  and 
if  a  class  of  rich  manufacturers  and  rich  merchants  had  been 
formed,  if  a  fortunate  concurrence  of  circumstances  had  placed 
the  property  of  the  clergy  in  the  hands  of  the  laity,  and  if 
an  energetic  Third  Estate,  with  its  appropriate  chamber  of 
legislation,  had  been  created  under  the  influence  of  which  the 
feudal  aristocracy  might  have  been  reformed,  the  physiocratic 
system  had  probably  never  seen  the  light.  It  is  obvious  that 
this  system  was  conceived  and  had  its  birth  in  reference  to  the 
situation  of  France  at  the  time  when  it  appeared,  and  that  it 
was  calculated  only  for  that  state  of  things. 

The  greatest  part  of  the  soil  of  France  was  at  that  time 
in  the  hands  of  the  clergy  and  nobility.  The  peasants  who 
cultivated  it  languished  in  servitude  and  personal  subjection, 
victims  of  superstition,  ignorance,  idleness,  and  misery.  Those 
who  possessed  the  instruments  of  production  were  wholly  ad- 

and  stimulating  industry,  whilst  the  latter  asks  no  favor  for  man  or  for  in 
dustry,  it  simply  demands  free  trade,  and  expects  all  other  blessings  to  flow 
from  the  operations  of  merchants  unrestrained  in  their  trade,  free  to  do 
whatever  the  spirit  of  gain  may  dictate.  If  the  old  system  has  been 
dubbed  the  mercantile  system,  the  other  should  be  named  the  commercial 
system,  as  being,  in  fact,  far  more  intensely  commercial  than  the  former. 
It  places  the  entire  interests  of  industry,  and  of  course  the  entire  material 
interests  of  men,  in  the  hands  of  merchants. 

We  trust  the  time  is  not  far  remote  when  the  era  of  the  industrial  system 
will  be  inaugurated  not  merely  for  the  production  of  wealth,  but  aiming  at 
the  promotion  of  human  comfort  and  human  advantage,  national  wealth 
and  national  strength.  —  [S.  C.] 

27 


418  SYSTEMS. 

dieted  to  frivolous  pursuits,  and  had  neither  intelligence,  nor 
taste  for  agriculture ;  those  who  held  the  plough  were  deprived 
of  intellectual  and  material  resources  for  agricultural  improve 
ments.  The  pressure  of  feudal  institutions  upon  agriculture 
was  aggravated  by  the  insatiable  demands  of  monarchy  upon 
producers,  and  those  demands  were  the  more  difficult  to  satisfy, 
as  the  nobility  and  clergy  were  exempt  from  taxes.  In  such  cir 
cumstances,  the  most  important  industries,  those  founded  upon 
the  agricultural  production  of  the  country,  and  upon  the  con 
sumption  of  the  great  mass  of  the  population,  could  not  flourish. 
Those  only  could  prosper  which  furnished  the  privileged  classes 
with  articles  of  luxury.  Foreign  commerce  was  limited  by  the 
inability  of  the  laboring  classes  to  consume  large  quantities  of 
tropical  commodities,  and  to  pay  for  them  with  the  surplus  of 
their  products ;  the  internal  trade  was  nearly  extinguished  by 
provincial  custom-houses. 

It  is  very  natural  in  such  a  state  of  things  that  thinkers, 
reflecting  upon  the  causes  of  the  misery  then  prevailing,  should 
be  convinced  that  so  long  as  agriculture  should  labor  under  such 
disadvantages;  so  long  as  the  proprietors  of  the  soil  and  of 
capital  should  be  without  interest  in  it ;  so  long  as  peasants 
should  remain  in  subjection  to  superstition,  idleness,  and  igno 
rance  ;  so  long  as  taxes  should  not  be  diminished  nor  justly 
imposed,  internal  custom-houses  must  be  continued,  foreign 
commerce  could  not  flourish,  and  the  country  could  not  prosper. 

But  these  philosophers  were  physicians  of  the  monarch,  court 
protege's,  and  intimate  friends  of  the  nobility  and  clergy ;  they 
did  not  wish  to  make  open  war  upon  absolute  power  any  more 
than  upon  the  clergy  or  the  nobility.  No  better  expedient 
offered  than  to  conceal  their  plan  of  reform  in  the  darkness  of 
an  abstruse  system,  just  as  before  and  after  them  ideas  of 
political  and  religious  reform  were  veiled  under  the  semblance 
of  philosophical  systems.  After  the  example  of  the  philosophers 
of  their  time  and  country,  who,  amidst  the  perturbations  of 
France,  sought  some  consolation  in  the  vast  field  of  philanthropy 
and  cosmopolitism,  as  the  father  of  a  family,  ruined  and  in 
despair,  betakes  himself  for  relief  to  the  recreations  of  the 


AGRICULTURAL    SYSTEM.  419 

tavern,  the  physiocrats,  infatuated  with  the  cosmopolite  princi 
ple  of  free  trade,  seized  upon  it  as  an  universal  panacea,  capable 
of  curing  all  the  evils  of  humanity.  After  having  gained  that 
idea  in  a  very  wide  range  of  thought,  they  dug .  deeply,  and 
found  in  the  net  income  of  the  soil  a  basis  conformable  to  their 
views.  Their  system  was  then  announced :  "  The  soil  alone 
yields  a  net  income,  consequently  agriculture  is  the  only  source 
of  wealth"  —  a  maxim  from  which  important  consequences  were 
deduced.  At  the  first  step  the  whole  feudal  edifice  was  to  fall, 
and  that  for  the  special  benefit  of  the  proprietors  of  land ;  all 
taxes  were  to  be  imposed  upon  land  as  the  source  of  all  wealth, 
and  thus  the  privileges  of  nobility  and  clergy  were  to  cease ; 
finally,  manufacturers  being  an  unproductive  class,  paying  no 
taxes,  were  to  have  no  protection  from  the  State,  and,  of  course, 
import  duties  were  to  be  suppressed. 

In  a  word,  they  had  recourse  to  the  most  absurd  arguments 
and  allegations  to  establish  the  great  truths  they  had  undertaken 
to  prove. 

Of  the  nation,  of  its  degree  of  culture  and  of  its  condition 
relatively  to  other  countries,  there  could  be  no  question,  for 
L'Ency  elope  die  Methodique  taught  that  the  "welfare  of  indivi 
duals  was  dependent  upon  that  of  the  whole  human  family." 
There  were  to  be  according  to  this  system  no  nations,  thereafter, 
no  wars,  no  commercial  restrictions  on  the  part  of  foreign 
countries ;  history  and  experience  were  thus  either  disregarded 
or  defaced. 

This  theory  had  the  great  advantage  of  appearing  to  be  op 
posed  to  the  system  of  Colbert  and  the  privileges  of  manufac 
turers,  and  of  favoring  the  owners  of  land,  whilst  in  fact  it  bore 
with  great  severity  upon  the  privileges  of  proprietors.  Poor 
Colbert  was  made  solely  responsible  for  the  sad  state  of  French 
agriculture,  though  it  was  well  known  that  France  possessed  no 
very  successful  department  of  industry  until  after  the  time  of 
Colbert ;  and  though  mere  common  sense  teaches  that  manufac 
tures  are  the  chief  means  of  promoting  the  prosperity  of  agri 
culture  and  commerce. 

The  revocation  of  the  Edict  of  Nantes,  the  foolish  wars  of 


420  SYSTEMS. 

Louis  XIV.,  and  the  prodigalities  of  Louis  XV.  were  entirely 
forgotten. 

Quesnay  in  his  subsequent  works  reproduced  and  affected  to 
refute,  one  by  one,  the  objections  which  his  system  had  encoun 
tered  ;  and  it  astonishes  us  to  notice  how  much  good  sense  he 
puts  in  the  mouths  of  his  adversaries,  and  with  what  mystical 
absurdities  he  opposes  them.  These  absurdities  were  neverthe 
less  regarded  as  wisdom  by  his  contemporaries,  because  the 
tendencies  of  his  system  responded  to  the  condition  of  France 
at  that  time,  as  well  as  to  the  cosmopolite  propensity  of  the 
eighteenth  century. 


CHAPTER  IV. 

THE  SYSTEM  OF  EXCHANGEABLE  VALUE,  IMPROPERLY  CALLED 
BY  THE  SCHOOL  THE  INDUSTRIAL  SYSTEM.* 

ADAM  SMITH. 

THE  doctrine  of  Adam  Smith  in  regard  to  international  com 
merce,  is  but  a  continuation  of  that  of  the  physiocrats.  Like 
the  latter,  it  disregards  nationality ;  it  excludes  almost  entirely 
politics  and  government ;  it  supposes  the  existence  of  perpetual 
peace  and  universal  association ;  it  depreciates  the  advantages 
of  national  manufacturing  industry,  as  well  as  the  means  of  ac 
quiring  it ;  it  demands  absolute  free  trade. 

Adam  Smith,  following  the  traces  of  the  physiocrats,  has 
committed  the  capital  fault  of  considering  absolute  free  trade  as 
a  dictate  of  reason,  and  of  neglecting  to  study  profoundly  the 
historical  development  of  that  idea. 

*  It  is  only  in  opposition  to  the  absolute  agricultural  system  of  the  phy 
siocrats  that  the  epithet  industrial  has  been  applied  to  the  system  of  Adam 
Smith.  It  is  indeed  by  no  means  applicable  if  taken  in  the  sense  of  manu 
facturing;  for  although  Smith  admits  that  manufactures  are  productive, 
he  does  not  conceal  his  preference  for  agriculture  and  agriculturists. — 
[H.  B  J 


THE    INDUSTKIAL    SYSTEM.  421 

The  intelligent  biographer  of  Adam  Smith,  Dugald  Stewart, 
informs  us  that  twenty-one  years  before  the  publication  of  his 
book,  in  1755,  in  a  literary  society,  Smith  pronounced  the  fol 
lowing  words,  which  appear  to  give  him  the  priority  of  the  idea 
of  free  trade  :  "  Men  are  ordinarily  considered  by  statesmen  and 
projectors,  as  the  material  for  a  kind  of  political  industry. 
These  projectors  disturb  the  operations  of  nature  in  human 
affairs,  whilst  they  should  be  let  alone  and  be  permitted  to  act 
freely  for  the  purpose  of  working  out  their  end.  To  elevate  a 
nation  from  the  lowest  degree  of  barbarism  needs  but  three 
things :  peace,  moderate  taxes,  and  a  tolerable  administration 
of  justice.  All  the  rest  comes  in  the  natural  course  of  things. 
Every  government  which  opposes  itself  to  this  natural  current,  or 
which  attempts  to  give  to  capital  a  different  direction,  or  to  arrest 
society  in  its  progress,  revolts  against  nature,  and  in  maintaining 
this  policy  becomes  a  tyrant  and  an  oppressor."  That  fundamen 
tal  thought  was  Adam  Smith's  starting  point,  and  his  later 
works  had  no  other  end  than  to  establish  and  to  demonstrate  it. 
He  was  confirmed  in  it  by  Quesnay,  Turgot,  and  other  leaders 
of  the  physiocratic  school,  with  whom  he  became  acquainted  on 
his  visit  to  France,  in  1765. 

It  is  obvious  that  Adam  Smith  regarded  this  idea  of  free  trade 
as  the  basis  upon  which  he  was  to  found  his  literary  reputation. 
It  is  natural  that  he  should  exert  himself  in  his  work,  to  set 
aside,  and  to  combat  every  obstacle  to  that  idea ;  that  regard 
ing  himself  as  the  champion  of  absolute  free  trade  he  should 
write  under  the  influence  of  this  preconception. 

With  such  prepossessions  how  could  he  appreciate  facts  and 
men,  history  and  statistics,  the  measures  of  governments  and 
their  authors,  from  any  other  point  of  view  than  that  of  their 
conformity  or  discrepancy  with  his  principle  ? 

The  passage  cited  from  Dugald  Stewart,  contains  the  germ 
of  Adam  Smith's  whole  theory.  Government  should  and  can 
have  no  other  task  than  to  administer  strict  justice,  and  to  make 
taxes  as  light  as  possible.  Statesmen  who  attempt  to  promote 
manufactures,  increase  shipping,  encourage  external  trade,  and 
protect  it  by  naval  power,  to  found  or  acquire  colonies,  are 


422  SYSTEMS. 

in  his  view  projectors  who  arrest  the  progress  of  society.  In 
his  eyes  there  is  no  nation ;  he  regards  only  society,  that  is,  an 
union  of  individuals.  Individuals  know  perfectly  the  business 
or  industry  which  is  most  advantageous  to  them,  and  are  per 
fectly  capable  of  choosing  the  means  which  will  conduct  them 
to  well-being. 

This   complete   annihilation  of  nationality  and  government, 
this  exaltation  of  individuality,  which  thus  became  the  origin  of 
all  productive  power,  could  only  claim  favor  by  taking  as  the 
object  of  its  studies  or  speculations,  not  productive  power,  but 
the   product   itself,  —  material  riches,  or  rather,  only  the  ex 
changeable  value  of  the  product.     Materialism  was  required  as 
an  escort  to  individualism,  in  order  to  conceal  the  immense  ad 
vantages  which  the  individual  derives,  or  may  derive,  from  the 
nation,  and  from  its  combination  or  association  of  productive 
powers.    It  was  necessary  to  reduce  political  economy  to  a  mere 
theory  of  values,  since  values  are  only  produced  by  individuals, 
and  since  the  State,  unable  to  create  values,  must  confine  all  its 
activity  to  awakening,  protecting,  and  encouraging  the  produc 
tive  power  of  individuals.     From  this  point  of  view,  political 
economy  may  be  thus  briefly  summed  up  : — Wealth  consists  in  the 
possession  of  exchangeable  values :     Exchangeable  values  are 
produced  by  individual  labor  combined  with  natural  agents  and 
capital :     Capital  is  formed  by  saving,  or  by  the  surplus  of  pro 
duction  over  consumption  :    As  the  amount  of  capital  employed 
is  greater,  so  is  the  division  of  labor ;  and  so,  consequently,  is 
productive  power :    Private  interest  is  the  best  stimulus  to  labor 
and  economy.     The  wisest   national  policy,  according  to  this 
theory,  must  of  course  consist  in  removing  all  restraints  upon 
activity  or  enterprise,  and  in  providing  well  for  the  general  se 
curity.     It  is  a  folly  to  compel  individuals  by  law  to  produce 
themselves  what  they  can  purchase  at  a  lower  price  from  others. 
This  system,  so  consistent  in  itself,  analyzing  and  tracing  with 
such  clearness  the  elements  of  wealth  and  the  work  of  produc 
tion,  and  appearing  to  refute  so  completely  the  errors  of  pre 
ceding  Schools,  could  not  fail  of  being  accepted  in  the  absence 
of  others  more  plausible.     But  at  the  bottom  this  system  was 


THE    INDUSTRIAL    SYSTEM.  423 

nothing  else  but  the  private  economy  of  all  the  individuals  of 
any  particular  country,  or  of  all  the  individuals  in  the  world, 
such  as  might  be  propounded  if  there  were  no  nations,  no  na 
tional  interests,  no  wars,  and  no  national  passions;  it  was 
nothing  but  a  theory  of  values,  a  theory  of  the  counting-house, 
and  not  a  doctrine  which  taught  how  all  the  productive  powers 
of  a  nation  are  awakened,  increased,  maintained  and  preserved 
for  the  benefit  of  its  civilization,  prosperity,  power,  duration, 
and  independence.* 

*  In  one  sense,  at  least,  the  system  of  Smith  and  Say  is  not  fairly  con 
sistent  with  itself.  It  appears  to  consult  the  interests  of  individuals  by 
claiming  for  them  the  right  of  freedom  from  intervention  in  private  affairs 
on  the  part  of  government.  It  claims  that  the  whole  subject  of  industry 
and  trade  shall  be  free  from  the  hand  of  government.  It  assumes  that  this 
must  be  an  advantage  to  individuals,  and  in  this  assumption  commits  a 
great  mistake.  It  lays  that  down  as  a  law  of  political  economy  which 
should  ever  be  an  open  question,  subject  to  the  discretion  of  individuals 
under  all  the  varying  circumstances  in  which  they  may  be  placed.  What 
is  best  for  individuals  in  trade  and  industry  cannot  be  laid  down  a  priori, 
even  as  to  the  wishes  of  individuals.  What  is  best  for  a  community  must 
generally  be  not  the  united  wishes  of  all  the  individuals,  but  a  compromise 
of  their  conflicting  interests,  which  can  only  be  made  and  enforced  by 
government.  The  government  may  as  effectually  favor  a  particular  class 
by  abstaining  from  action  as  by  action.  Leaving  trade  entirely  free  is  pro 
tection  of  the  highest  order  to  merchants,  though  it  may  consist  in  doing 
nothing.  Building  navies  to  protect  commerce  is,  on  the  other  hand,  posi 
tive  protection.  It  is  a  fatal  blunder  indeed  to  assume  that  a  whole  com 
munity  of  individuals  can  judge  best  what  is  good  for  them  as  a  whole.  It 
is  true,  the  largest  liberty  must  be  allowed  them ;  but,  in  the  matter  of 
trade  and  industry,  as  in  everything  else,  it  is  the  largest  consistent  with 
their  good.  There  is  a  continual  disposition  on  the  part  of  different  indi 
viduals  and  classes  to  prey  upon  others ;  this  needs  to  be  constantly  re 
pressed  by  the  hand  of  authority.  In  no  case  is  this  disposition  to  prey 
upon  others  more  visible  than  in  trade ;  and  in  no  case  of  life,  or  liberty, 
or  property,  do  men  more  require  to  be  protected  from  each  other  ;  yet  free 
trade  leaves  the  career  of  doing  and  deciding  for  themselves  entirely  free 
to  men  of  trade.  They  are  supposed  to  understand  the  interests  of  a  whole 
country  best,  and  to  be  so  disinterested  as  to  be  guided  by  the  interests  of 
a  country,  instead  of  being  guided  by  their  own.  Free  trade  does  not,  in 
point  of  fact,  give  any  freedom  to  industry,  or  leave  to  individuals  the 
choice  of  their  employments.  It  turns  over  the  whole  subject  to  a 
comparatively  small  class  of  merchants ;  instead  of  leaving  men  free  to 


424  SYSTEMS. 

This  system  regards  everything  from  a  commercial  point  of 
view.  The  value  of  things  is  wealth :  to  acquire  values  was  to 
obtain  wealth.  The  development  of  productive  power  is  aban 
doned  by  it  to  hazard,  nature,  or  Providence,  as  it  may  happen. 
As  for  the  government,  it  has  no  part  in  the  matter,  and  as  for 
public  policy,  it  has  no  concern  in  the  accumulation  of  values. 
Merchants  always  desire  to  purchase  in  the  cheapest  market ; 
heavy  importations  may  ruin  the  manufactures  of  the  country ; 
it  is  of  no  consequence.  If  foreign  nations  grant  premiums  of 
exportation  on  their  manufactured  products,  so  much  the  better, 
their  goods  come  so  much  the  cheaper.  Only  those  who  produce 
exchangeable  values  are  producers  in  their  eyes.  The  advan 
tages  in  detail  of  the  division  of  labor  are  understood,  but  the 
division  of  labor  which  applies  to  the  nation  is  not  perceived. 
It  is  only  by  the  way  of  individual  saving  that  capital  is  in 
creased,  and  it  is  only  in  proportion  as  capital  is  increased  that 
business  is  increased  or  extended.  As  to  the  development  of 
productive  power  produced  by  the  establishment  of  manufactures, 
by  external  trade,  and  by  that  national  vigor  which  is  the  re 
sult,  no  value  whatever  attaches  to  it.  The  future  of  a  nation 
is  of  no  importance,  provided  the  individuals  of  which  it  con 
sists  acquire  exchangeable  values.  Of  land,  the  rent  is  alone 
deemed  worthy  of  notice ;  the  value  of  the  soil  is  not  considered. 
This  system  is  blind  to  the  fact  that  the  greatest  part  of  the 

choose  their  occupations,  it  takes  away  that  freedom,  and  brings  the 
competitions,  the  changes,  the  chances,  and  the  revulsions  of  all  the  nations 
of  the  world  to  bear  upon  the  industry  of  every  particular  country.  In 
such  a  complication,  how  could  the  mass  of  the  individuals  of  a  country 
decide  intelligently  what  course  of  industry  was  most  for  their  interest  ? 
Such,  in  fact,  must  ever  be  the  fluctuations  of  foreign  trade,  and  especially 
of  free  trade,  that  what  is  best  one  year  may  be  the  worst  another.  Uni 
versal  free  trade  would  gradually  commit  the  material  interests  of  men 
to  the  hands  of  a  small  number  of  capitalists  —  a  class  which  would 
tend  to  grow  smaller  as  the  leading  men  accumulated  larger  capitals. 
The  control  would  gradually  fall  into  the  hands  of  the  Rothschilds,  Barings, 
and  Girards.  This  system  favors  a  few  individuals,  therefore,  at  the  ex 
pense  of  millions.  Universal  free  trade  would  place  the  commerce  and 
industry  of  the  world  under  the  dominion  of  English  capital  and  English 
manufacturers.  —  [S.  C.] 


THE    INDUSTRIAL    SYSTEM.  425 

wealth  of  a  country  consists  in  its  cultivated  lands  and  in  its 
real  estate.  The  influence  of  trade  upon  the  value  of  land, 
the  fluctuations  and  calamities  incident  to  trade,  and  which  are 
visited  indirectly  upon  lands,  claim  none  of  their  attention ;  in 
a  word,  it  is  the  most  absolute,  the  most  consistent  mercantile 
system  which  has  ever  existed,  and  it  is  incredible  that  Colbert's 
system,  quite  industrial  in  its  tendencies,  has  borne  that  name ; 
since,  taking  no  account  of  gain  or  loss  in  exchangeable  values, 
it  had  only  in  view  the  creation  of  a  national  industry  and  a 
national  commerce. 

Our  intention  is  not,  however,  to  call  in  question  the  eminent 
merits  of  Adam  Smith.  He  was  the  first  to  apply  with  success 
the  analytic  method  to  political  economy.  By  the  aid  of  that 
method  and  his  extraordinary  penetration,  he  carried  light  into 
very  important  subjects  which  had  previously  been  enveloped  in 
darkness.  Before  Adam  Smith  there  was  only  one  system ;  his 
labors  have  rendered  possible  the  construction  of  a  science  of 
political  economy ;  he  has  furnished  for  that  purpose  more  mate 
rials  than  those  who  have  preceded  or  those  who  have  succeeded 
him. 

But  the  same  powers  of  mind  to  which  we  owe  his  remark 
able  economical  analysis,  explain  why  he  was  not  able  to  keep 
in  his  view  society  as  a  whole ;  why  he  was  not  able  to  bring 
together  the  details  into  an  harmonious  whole;  why  he  has 
neglected  the  nation  for  the  individuals ;  why,  preoccupied  with 
the  unrestrained  activity  of  producers,  he  has  lost  sight  of  the 
great  object  of  the  nation.  He  who  understood  so  well  the  ad 
vantages  of  division  of  labor  in  a  manufactory,  did  not  perceive 
that  the  same  principle  applies  with  the  same  force  to  provinces, 
districts,  and  entire  nations. 

Our  opinion  accords  entirely  with  what  Dugald  Stewart  says 
of  Adam  Smith.  Smith  appreciated  certain  traits  of  character 
with  rare  sagacity ;  but  when  he  pronounces  judgment  upon  the 
entire  qualities  of  a  character,  or  upon  the  whole  of  a  book,  we 
are  at  once  surprised  at  the  narrowness  and  unsoundness  of  his 
views.  He  could  not  judge  correctly  even  those  with  whom  he 
had  lived  in  terms  of  intimacy  for  many  years. 


426  SYSTEMS. 

"Any  portrait  drawn  by  him,"  as  his  biographer  remarks, 
"  was  always  lively  and  expressive ;  it  had  a  great  resemblance 
to  the  original  considered  under  a  certain  point  of  view,  but  it 
did  not  reproduce  the  original  complete  and  exact  in  all  its 
features  and  members." 


CHAPTER  V. 

CONTINUATION  OF  THE  FOREGOING. 
J.  B.  SAY  AND   HIS   SCHOOL. 

J.  B.  SAY  has  in  point  of  fact  only  arranged  the  materials 
confusedly  amassed  by  Adam  Smith,  thereby  rendering  them  in 
telligible  and  popular ;  he  possessed  in  a  high  degree  the  talent 
of  systematizing  and  explaining,  and  was  therefore  fully 
successful. 

There  is  in  his  writings  nothing  new  nor  original,*  except 
that  he  claims  for  intellectual  labor  the  quality  of  productive 
ness,  which  is  refused  to  it  by  Adam  Smith.  But  that  idea,  how 
ever  correct  in  the  theory  of  productive  power,  is  in  contradic 
tion  with  that  of  exchangeable  values,  and  Smith  is  evidently 
more  consistent  with  himself  than  Say.  Intellectual  laborers  do 
not  produce  directly  exchangeable  values  :  they  rather  diminish 
directly,  by  their  consumption,  the  mass  of  income  and  savings, 
or  material  wealth.  The  ground,  therefore,  upon  which  J.  B. 
Say  from  his  point  of  view  attributes  productiveness  to  intellec 
tual  labors,  that  they  were  paid  with  exchangeable  values,  is  not 
tenable;  for  those  values,  are  already  produced  before  passing 
into  the  hands  of  intellectual  laborers.  They  only  change 
owners,  but  their  quantity  is  not  increased  by  that  exchange. 
The  title  of  producers  can  be  given  to  intellectual  laborers  only 
so  far  as  national  wealth  is  found  to  consist  in  the  productive 

*  List  has  forgotten  the  theory  of  markets,  the  discovery  of  which  by 
Say  is  not  disputed  by  the  English  economists. 


SAT    AND    HIS    SCHOOL.  427 

power  of  the  nation,  and  not  in  the  possession  of  exchangeable 
values.  Say  was  placed  in  this  respect  relatively  to  Smith  in 
the  same  position  as  Smith  had  occupied  relatively  to  the  physi 
ocrats.  In  order  to  class  manufacturers  among  producers,  Adam 
Smith  was  obliged  to  enlarge  the  idea  or  definition  of  wealth ;  and 
Say,  on  the  other  hand,  found  himself  in  the  alternative  of 
adopting  either  the  absurdity  of  Adam  Smith,  that  intellectual 
labor  is  not  productive,  or  of  enlarging  the  definition  of  national 
riches,  as  his  predecessors  had  done,  by  applying  it  to  productive 
power,  and  defining  national  riches  not  as  consisting  in  the  pos 
session  of  exchangeable  values,  but  in  productive  power ;  as  the 
wealth  of  a  fisherman  consists  not  in  possession  of  fish,  but  in 
the  apparatus  for  and  power  of  catching  fish. 

It  is  worthy  of  remark,  and,  if  we  do  not  mistake,  the  fact  is 
not  generally  known,  that  J.  B.  Say  had  a  brother  who  had  the 
good  sense  and  sagacity  to  discover  the  imperfections  of  the 
theory  of  exchangeable  values,  and  that,  feeling  the  force  of  his 
brother's  objections,  he  could  not  but  entertain  doubts  himself  of 
the  truths  of  this  doctrine. 

Louis  Say,  of  Nantes,  thought  that  a  vicious  nomenclature 
had  been  introduced  into  political  economy,  which  had  been  the 
source  of  many  difficulties,  and  that  his  brother,  J.  B.  Say,  was 
not  free  from  censure  in  this  respect.*  In  his  opinion  the 
wealth  of  nations  consists  not  in  material  property  and  in  its 
exchangeable  value,  but  in  the  power  of  producing  it  in  a  con 
tinuous  manner.  The  theory  of  exchangeable  value  as  held  by 
Smith  and  J.  B.  Say  regards  wealth  merely  in  the  narrow  sense 
of  merchandise  ;  and  the  system,  which  affects  to  reform  what  is 
called  the  mercantile  system,  is  itself  but  a  mercantile  system 
not  less  narrow.  J.  B.  Say  replied  to  the  doubts  and  objections 
urged  against  his  system  by  his  brother,  that  although  his 
system  or  theory  of  exchangeable  value  was  far  from  being  good, 
the  difficulty  was  to  find  a  better. f 

*  Louis  Say:  Etudes  sur  les  Richesse  des  Nations ;  Preface,  page  IV. 

f  We  produce  the  very  words  of  Louis  Say,  from  his  pamphlet,  published 
in  1836.  "Although  Adam  Smith  has  contributed  much  to  the  advance 
ment  of  the  science  of  the  wealth  of  nations,  yet  his  false  theory  and  the 


428  SYSTEMS. 

How  to  find  a  better !  Had  not  his  brother  Louis  found  it 
already  ?  But  the  economists  either  had  not  sufficient  penetra- 

vicious  nomenclature  introduced  by  him  have  given  rise  to  nearly  all  the 
difficulties  it  presents."  Preface,  IV. 

"  The  wealth  of  a  man  consists  in  his  power  to  supply  his  wants  and 
gratify  his  tastes ;  provided,  however,  that  this  power  is  not  merely  for  the 
moment ;  for  he  who  has  an  abundance  for  a  day  is  not  so  rich  as  he  who 
has  a  less  quantity  for  a  great  many  days." — Page  10. 

"  The  modern  School  of  Adam  Smith  calls  the  School  which  regarded 
the  precious  metals  as  the  only  wealth,  the  mercantile  system.  Merchants 
regard  wealth  as  consisting  of  the  exchangeable  value  of  what  they  possess  ; 
it  is  their  system  which  ought  to  be  called  the  mercantile  system." — Note, 
page  14. 

"  When  my  brother,  J.  B.  Say,  asked  my  opinion  of  his  Treatise  upon 
Political  Economy,  I  was  struck  with  the  light  shed  by  it  upon  the  science 
in  establishing,  '  That  there  is  only  a  production  of  wealth  when  there  is 
a  creation  or  augmentation  of  utility ;  and  by  utility  he  means  the  power 
which  certain  things  have  of  satisfying  the  wants  of  men  : 

"  That  the  utility  of  a  thing  constitutes  its  real  and  technical  value : 

"  That  wealth  is  in  proportion  to  this  value. 

"  But,  as  I  proceeded  farther,  and  found  that  he  employed  the  exchangeable 
or  commercial  value. of  things  to  estimate  their  utility,  I  could  not  but  re 
mark  to  him  that  I  regarded  this  method  of  valuation  as  inexact,  and  even 
as  involving  very  grave  errors.  He  replied,  that  in  fact  the  method  was  far 
from  being  good,  but  the  difficulty  was  to  find  a  better." — Note,  page  36. — 
[H.R.] 

Richelot  adds  to  the  foregoing  note  two  other  passages  from  the  same 
production  of  Louis  Say,  in  which  he  expresses  opinions  differing  from 
those  of  Smith  and  J.  B.  Say ;  and  in  the  last  of  which  he  uses  these 
words : — "  To  sum  up  what  I  have  said  on  this  subject,  I  think  there  is  no 
need  of  adopting  absolutely  in  regard  to  foreign  trade,  either  the  system 
of  free  trade  or  the  system  of  restriction  without  limits.  Taxes  upon  the 
consumer  ought  to  be  tolerated,  because  the  result  may  be  an  evident  ad 
vantage  for  the  wealth  of  the  nation." — Page  75. 

J.  B.  Say's  Treatise,  which  has  exercised  such  undisturbed  sway  in  this 
country,  encountered  many  other  and  more  formidable  critics  than  his 
brother  in  France  and  elsewhere.  The  pressure  of  their  objections  was 
sufficiently  powerful  to  force  from  him  in  his  Complete  Course  of  Practical 
Political  Economy,  explanations  and  admissions  even  more  important  than 
that  made  to  his  brother.  At  the  very  time  that  the  Treatise  was  at  the 
height  of  its  popularity,  and  when  it  was  in  course  of  translation  into 
various  languages,  and  of  introduction  into  numerous  institutions  of  learn 
ing,  J.  B.  Say  was  before  his  own  special  class  of  students  making  modifi- 


SAY    AND    HIS    SCHOOL.         ,  429 

tion  to  understand  and  develop  the  idea  vaguely  expressed  by 
the  brother  of  J.  B.  Say ;  or  else  they  hesitated  to  dissolve  a 
School  already  founded,  and  to  teach  precisely  the  -opposite  of 
the  doctrine  to  which  J.  B.  Say  owed  his  celebrity,  jv  . 

What  belongs  to  Say  in  his  works  is  merel^<&e  Xf6rm  of  the 
system ;  it  is  his  definition  of  political  economy  as  the  science 
of  the  production,  distribution,  and  consumption  of  riches.  It 
is  due  to  this  happy  division  of  the  subject,  and  to, his  mode  of 
handling  it,  that  J.  B.  Say  succeeded  and  became  the  head  of  a 
School.  There  is  nothing  astonishing  in  this;  the  reason, 
indeed,  is  palpable;  for  its  author  had  sketched  with  plau 
sible  clearness  the  processes  of  production  and  the  individual 
power  which  it  employs  ;  he  had,  within  his  special  limits,  made 
the  principle  of  the  division  of  labor  intelligible,  and  he  had 
very  distinctly  explained  the  process  of  exchange  between 
individuals.  There  was  neither  workman  nor  shopkeeper  who 
could  not  understand ;  because,  in  fact,  J.  B.  Say  had  taught 
very  little  that  was  new.  For  it  was  long  known,  in  even  the 
humblest  pottery,  that  the  hands  and  the  skill  of  the  potter  or 
the  laborer  were  to  concur  with  the  clay  or  raw  material,  to  pro 
duce,  by  means  of  a  wheel,  a  furnace,  fuel,  and  capital,  articles 
of  pottery,  or  products  having  value,  or  exchangeable  values. 
The  application  of  a  new  nomenclature  or  of  learned  words  to 
these  things  had  not  been  made  before  his  time,  nor  was  the 
generalization  by  means  of  these  words  familiar. 

Very  few  shopkeepers  were  ignorant  before  they  were  taught 
by  J.  B.  Say,  that  in  an  exchange  both  parties  might  realize 
a  gain,  and  that  he  who  exports  a  thousand  dollars'  worth  of 
goods  abroad,  and  imports,  in  return,  goods  to  the  value  of 
fifteen  hundred  dollars,  has  made  a  profit  of  five  hundred  dollars. 
It  was  generally  known  long  before,  that  labor  brings  wealth 
and  that  idleness  brings  misery ;  that  personal  interest  is  the 
most  powerful  stimulus  to  activity ;  and  that  if  one  wishes  to 

cations  and  explanations  of  his  system  of  serious  import,  which  are  yet 
unknown  to  most  of  his  votaries,  and  which,  so  far  as  we  know,  no  subse 
quent  editor  of  his  Treatise  has  indicated.  See  remarks  of  the  Editor,  in 
which  this  inconsistency  is  more  fully  pointed  out.  —  [S.  C.] 


430  SYSTEMS. 

have  chickens  he  must  not  eat  the  eggs.  It  was  not  known,  it 
is  true,  that  all  this  was  political  economy;  but  people  were 
delighted  at  being  so  easily  initiated  into  the  profound  secrets 
of  the  science,  at  the  prospect  of  being  thus  delivered  from  the 
odious  taxes  which  so  enhanced  the  prices  of  those  articles  of 
consumption  which  they  most  prized,  and  of  obtaining,  besides, 
perpetual  peace  in  tht;  markets  of  the  world,  and  a  millennial 
fraternity  of  trade  throughout  the  whole  earth.  It  is,  therefore, 
not  surprising  that  so  many  learned  men  and  public  function 
aries  have  taken  sides  with  the  admirers  of  Smith  and  Say,  for 
the  principle  of  laisses  oiler,  laisses  passer,  [allowing  things 
to  take  their  own  course],  required  no  effort  of  intelligence, 
except  from  those  who  had  first  brought  it  to  light  and  estab 
lished  it ;  nothing  was  left  for  the  writers  who  followed  them 
but  to  reproduce  the  same  positions  and  arguments,  and  to  adorn 
and  explain  them.  Who  would  not  have  the  ambition  and  the 
capacity  of  becoming  a  great  statesman,  when  to  be  such, 
nothing  more  was  necessary  than  quiet  inaction  and  folded  arms  ? 

It  is  the  characteristic  of  systems,  that  if  men  have  once 
admitted  their  principles,  or  even  if  they  have  blindly  agreed 
with  the  author  to  the  extent  of  only  a  few  chapters,  they  are  lost. 
Beginning  then,  with  J.  B.  Say,  we  declare  our  dissent  at  once, 
and  say  that  political  economy,  as  we  understand  it,  is  not 
limited  to  teaching  how  exchangeable  values  are  produced  by 
individuals,  distributed  among  them,  and  consumed  by  them ; 
we  declare  that  a  statesman  must  learn  and  needs  to  learn 
something  more ;  that  he  must  know  how  the  productive  powers 
of  a  whole  nation  are  awakened,  increased,  and  protected  ;  how 
they  are  diminished,  checked,  or  even  destroyed  ;  how,  by  means 
of  the  productive  power  of  a  country,  its  resources  can  be  most 
efficiently  employed  in  prolonging  national  existence,  and  in 
securing  independence,  prosperity,  power,  civilization,  and  the 
future  well-being  of  a  nation. 

From  the  extreme  principle  that  the  State  can  and  must 
regulate  everything,  Say's  system  passed  to  the  opposite  ex 
treme,  that  the  State  cannot  and  must  not  do  anything ;  that 
the  individual  is  everything  and  that  the  State  is  nothing. 


SAY    AND    HIS    SCHOOL.  431 

The  omnipotence  of  individuals  and  the  impotence  of  the  State 
become  in  Say's  hands  exaggerations  absolutely  ridiculous. 
Finding  it  impossible  not  to  admire  the  efforts  of  Colbert  for  the 
industrial  education  of  the  nation,  he  exclaims:  "More  could 
scarcely  have  been  expected  from  the  wisdom  and  the  personal 
interests  of  individuals!" 

If  from  the  system  we  pass  to  the  author,  we  find  in  Say  a 
man  who,  without  extensive  knowledge  of  history,  without  pro 
found  political  and  administrative  studies,  without  the  compre 
hensive  views  of  a  statesman  or  a  philosopher,  with  but  one  idea 
in  his  mind,  and  that  borrowed,  gropes  in  history,  politics, 
statistics,  commercial  and  industrial  relations,  to  find  circum 
stances  and  facts,  which,  stated  in  his  own  way,  may  serve  his 
purpose.  Read  what  he  has  written  upon  the  Act  of  Navigation, 
the  treaty  of  Methuen,  the  system  of  Colbert,  the  treaty  of 
Eden,  and  you  will  find  full  confirmation  of  our  opinion.  It 
seems  not  to  have  occurred  to  him  to  study  the  chain  of  history 
in  its  revelation  of  the  commerce  and  industry  of  nations.  He 
acknowledges  that  nations  have  become  rich  and  powerful  under 
the  protective  system ;  but  if  we  believe  him,  they  became  so  in 
spite  of,  and  not  by  virtue  of  protection,  and  he  expects  this  to 
be  taken  upon  his  word.  It  was,  as  he  asserts,  because  Philip 
II.  prohibited  the  Dutch  from  entering  the  Portuguese  ports, 
that  they  began  to  trade  directly  with  the  East  Indies,  as  if 
such  an  interdict  had  been  justified  by  the  protective  system, 
as  if  without  it  the  Dutch  could  not  have  found  the  new  route 
to  the  Indies.  Say  was  still  less  fond  of  statistics  and  politics 
than  of  history ;  probably  they  presented  stubborn  facts,  which 
could  not  be  bent  into  any  accordance  with  his  system,  and 
because  he  could  never  fully  understand  them.  He  never 
wearies  of  warning  his  reader  against  the  illusions  to  which 
statistics  may  lead,  nor  of  reminding  them  that  politics  have 
nothing  to  do  with  political  economy,  which  is  equivalent  to 
saying,  that  in  examining  a  vessel  of  tin  we  must  never  take 
into  consideration  the  metal  of  which  it  is  made. 

Say,  who  was  first  a  merchant,  then  a  manufacturer,  then  an 
unlucky  politician,  betook  himself  at  last,  to  political  economy, 


432  SY'STEMS. 

as  a  man  resorts  to  a  new  enterprise  when  old  undertakings  no 
longer  succeed.  He  hesitated  at  the  beginning,  by  his  own  con 
fession,  whether  he  should  declare  for  the  mercantile  system,  or 
for  free  trade.  In  hatred  of  the  continental  system,  which  had 
ruined  his  manufacturing  business,  and  of  the  author  of  that 
system,  who  had  deposed  him  from  the  tribunate,  he  decided, 
finally,  to  embrace  absolute  free  trade. 

The  word  liberty,  upon  whatever  occasion  it  is  used,  has  had 
in  France  for  fifty  years  a  magical  influence.  Under  the  French 
Empire,  as  well  as  under  the  Restoration,  Say  belonged  to  the 
opposition,  and  constantly  urged  economy  ;  his  writings  thus 
became  popular  for  reasons  independent  of  their  theory.  How 
else  would  that  popularity  have  survived  the  fall  of  Napoleon, 
in  a  time  when  the  adoption  or  the  enforcing  of  his  system  must 
have  infallibly  ruined  the  French  manufacturers  ?  His  stubborn 
adherence  to  the  cosmopolite  principle  in  such  circumstances, 
gives  the  measure  of  his  political  ability.  The  firmness  of  his  faith 
in  the  cosmopolite  tendencies  of  Canning  and  Huskisson  exhibits 
the  extent  of  his  knowledge  of  the  world.  To  be  entrusted  by 
Louis  XVIII.  or  Charles  X.  with  the  department  of  commerce 
and  finance,  was  all  he  needed  to  fill  the  measure  of  his  glory. 
History  would  then  have  undoubtedly  inscribed  his  name  by  the 
side  of  Colbert's,  the  latter  as  the  creator,  the  former  as  the 
destroyer,  of  national  industry. 

Never  did  a  writer  with  less  to  justify  it,  carry  such  terror 
into  the  ranks  of  science  as  J.  B.  Say ;  the  slightest  doubt  of 
his  infallibility  was  visited  with  the  withering  epithet  of  igno 
rance,  and  even  men  like  Chaptal  dreaded  the  anathema  of  this 
pope  of  political  economy.  The  work  of  Chaptal  on  French 
industry  is  from  beginning  to  end  nothing,  as  he  expressly  de 
clares,  but  an  exhibition  of  the  results  of  the  protective  system 
in  France.  He  declares,  that  in  the  actual  state  of  the  world, 
there  could  be  no  salvation  for  France  but  in  the  protective 
system.  But  although  the  opposite  tendency  pervades  his  whole 
work,  Chaptal  propitiates  the  School  of  Say  by  an  eulogy  upon 
free  trade,  by  way  of  purchasing  indulgence  for  his  heresy. 
Say  even  went  so  far  in  his  imitation  of  the  papacy  as  to  adopt 


SAT    AND    HIS    SCHOOL.  433 

the  (index)  expurgatorius.  He  did  not,  it  is  true,  specially 
prohibit  heretical  writings :  his  prohibition,  still  more  sweeping, 
rejects  both  orthodox  and  heterodox.  He  warns  young  men 
who  study  political  economy,  not  to  read  too  many  books  by 
which  there  is  danger  of  being  led  astray,  but  he  permits  them 
to  read  a  few  very  good  books;  that  is  virtually  saying,  "You 
may  read  Adam  Smith  and  myself,  and  no  one  else."  But  as 
the  late  father  of  the  School,  without  proper  caution,  might 
have  received  too  large  a  share  of  the  homage  of  the  student, 
his  lieutenant  and  interpreter  in  this  world  makes  this  all  right 
by  stating  that  the  writings  of  Smith  are  full  of  confusion,  of 
faults,  and  of  contradictions ;  giving  it  to  be  clearly  understood, 
that  he  alone  can  explain  how  Adam  Smith  is  to  be  read. 

When  Say  was  at  the  zenith  of  his  glory,  however,  young 
dissenters  appeared,  who  attacked  the  basis  of  his  system,  with 
such  power  and  audacity,  that  he  deemed  it  better  to  reprove 
them  privately,  and  quietly  to  avoid  public  debate ;  among  them 
Tanneguy  Duchatel,  since,  and  still  a  minister  of  State,  was 
the  most  ardent  and  intelligent.  "According  to  you,  my  dear 
critic,"  writes  Say  to  Mr.  Duchatel,  in  a  private  letter,  "there 
is,  in  my  political  economy,  nothing  but  acts  without  motives, 
facts  without  explanation,  and  chains  of  relations,  the  ends  of 
which  are  wanting,  and  of  which  the  most  important  links  are 
broken.  I  partake,  therefore,  the  misfortune  of  Adam  Smith, 
of  whom  one  of  our  critics  said  that  he  had  caused  political 
economy  to  retrograde." 

In  a  postscript  to  that  letter,  he  makes  this  artless  remark : — 
"As  to  the  second  article,  which  you  announce,  let  me  say  it 
seems  needless  to  return  to  these  disputed  topics,  by  which  we 
shall  weary  the  public." 

The  School  of  Smith  and  Say  in  France  is  now  dissolved ; 
to  the  unintelligible  despotism  of  the  theory  of  exchangeable 
values,  has  succeeded  anarchy  and  revolution,  which  neither 
M.  Rossi  nor  M.  Blanqui  is  able  to  repress.  St.  Simonians 
and  Fourierists,  men  of  remarkable  talents,  instead  of  reforming 
the  old  science,  have  completely  rejected  it,  and  indulged  them 
selves  in  Utopian  schemes.  Recently,  however,  some  of  the 
28 


434  SYSTEMS. 

most  eminent  of  them  have  attempted  to  connect  their  doctrine 
with  that  of  the  preceding  School,  and  to  hring  their  ideas  into 
relation  with  the  actual  state  of  things.  We  may  expect  much 
from  their  labors,  and  especially  from  the  remarkable  talents  of 
Michel  Chevalier.  What  there  is  of  truth  and  of  practicability 
in  these  new  theories,  may  be  explained  in  a  good  degree  by 
the  principle  of  association  and  the  harmony  of  productive 
powers.  The  annihilation  of  liberty  and  of  individual  indepen 
dence,  is  their  weak  side ;  in  these  theories  the  individual  is 
entirely  lost  in  the  mass  of  society,  in  opposition  to  the  theory 
of  exchangeable  value,  in  which  the  individual  is  all,  and  the 
State  nothing.  It  is  possible  that  humanity  is  tending  to  the 
realization  of  a  state  of  things  of  which  these  men  dream,  or 
for  which  they  appear  to  hope.  In  any  event,  it  seems  to  me 
that  many  centuries  must  elapse  before  their  dreams  can  be 
realized.  It  has  not  been  given  to  any  mortal  to  find  in  the 
inventions  of  the  time,  or  in  the  present  condition  of  society, 
any  index  by  which  to  measure  the  progress  of  the  future.  The 
intelligence  of  Plato  gave  him  no  presentiment  that  in  less  than 
thirty  centuries  the  slaves  of  society  would  be  made  of  iron, 
steel,  and  brass ;  Cicero  could  not  foresee,  that  the  press  would 
permit  the  extension  of  the  representative  system  to  whole  em 
pires,  perhaps  even  to  whole  continents,  and  to  the  entire 
human  family.  If  it  has  been  given  to  some  great  minds  to 
divine  something  of  the  progress  to  be  made  in  a  thousand 
years,  yet  each  period  has  ever  had  its  particular  mission.  The 
task  of  that  in  which  we  now  live  is  apparently  not  to  parcel 
out  men  into  phalansteries,  like  those  of  Fourier,  making  them 
as  equal  as  possible  in  intellectual  and  physical  enjoyments,  but 
to  increase  productive  power,  intellectual  culture,  the  knowledge 
of  government  and  national  strength,  and  to  prepare  nations,  by  a 
gradual  equalization  of  their  power,  for  some  form  or  degree  of 
universal  association.  For,  suppose  that  in  the  present  state  of 
the  world,  the  phalansteries  should  realize  the  immediate  end 
which  their  advocates  propose  to  themselves,  we  may  ask  what 
would  be  their  influence  upon  the  power  and  independence  of 
the  country  ?  Would  not  a  nation  parcelled  out  into  phalanste- 


SAY    AND    HIS    SCHOOL.  435 

ries  be  exposed  to  the  danger  of  being  conquered  by  nations 
still  in  their  former  condition,  and  of  seeing  their  visionary- 
creations  annihilated  with  the  nation  itself. 

The  theory  of  exchangeable  value  has  now  fallen  into  such  a 
state  of  impotency  as  to  be  almost  exclusively  engaged  in  re 
searches  upon  the  nature  of  rent ;  Ricardo,  in  his  Principles  of 
Political  Economy,  has  gone  so  far  as  to  say  that  to  determine 
the  laws  by  which  the  products  of  the  soil  are  apportioned 
among  proprietors,  farmers,  and  laborers,  constitutes  the  prin 
cipal  problem  of  political  economy. 

Whilst  some  boldly  declare  that  the  science  is  complete,  and 
that  there  is  nothing  more  essential  to  be  added,  those  who  read 
with  the  eyes  of  philosophers  or  statesmen,  the  works  which  are 
written  upon  it,  maintain  that  there  is  no  political  economy; 
that  the  science  is  still  to  be  created ;  that  it  has  been  hereto 
fore  but  a  kind  of  astrology ;  that  it  is  possible  and  desirable 
that  a  real  science  may  yet  be  constructed  upon  this  subject.* 

*  The  men  who  have  the  most  right  to  speak  of  political  economy  have 
never  pretended  that  it  had  attained  a  complete  development.  We  believe 
ourselves  initiated,  says  one  of  its  greatest  proficients,  and  yet  we  are  but 
upon  the  threshold.  There  is  modesty  in  this  language  of  McCulloch ;  but 
we  cannot  regard  this  strange  assertion  of  List,  that  the  science  is  not  yet  in 
existence,  and  that  to  the  present  time  it  is  but  a  kind  of  astrology,  in  any 
other  light  than  an  expression  of  ill-humor.  The  science  has  existed  three 
quarters  of  a  century.  During  that  time,  in  the  midst  of  contradictions, 
errors,  and  the  vagaries  of  its  disciples,  it  has  not  ceased  to  make  progress  ; 
and  it  has  shed  around  it,  who  can  deny  it,  a  bright  and  beneficent 
light.  It  may  be  said  of  it,  Blind  are  they  who  will  not  see  it !  It  is  much 
more  advanced  than  is  commonly  thought ;  but  there  is  no  propriety  in 
considering  the  works  of  Smith  and  Say,  however  great  their  merit,  as 
the  expression  of  its  actual  condition.  Neither  in  England  nor  upon  the 
continent  has  its  progress  been  arrested  by  the  death  of  these  men. — 
[II.  K.] 

Although  there  may  be  some  extravagance  in  the  expression  of  List,  we 
think  he  had  strong  reasons  at  least  for  saying  that  the  science  is  yet  to 
be  created.  In  our  view,  it  is  not  extravagant  to  aver,  that  upon  the  premises 
of  Say,  a  science  has  not  only  not  been  created,  but  cannot  be.  There 
can  be  no  science  of  wealth  considered  apart  from  human  welfare ;  yet  that 
is  what  Say  aimed  to  accomplish.  He  looked  upon  men  only  as  the  natu 
ralist  looks  upon  bees,  to  ascertain  their  habits,  propensities,  and  wants. 


436  SYSTEMS. 

To  prevent  misapprehension  of  our  meaning,  we  finish  by 
observing  that  our  criticism  of  the  writings  of  J.  B.  Say,  as 
well  as  of  those  of  his  predecessors  and  successors,  bears  only 
upon  their  national  and  international  relations ;  and  that  we  do 
not  attack  their  merit  in  the  elaboration  of  subordinate  doc 
trines.  It  is  obvious  that  the  ideas  and  the  deductions  of  an 
author  on  some  branches  of  science  may  be  excellent,  whilst  the 
basis  of  his  system  is  erroneous. 

He  discovered  that  men  must  work  to  live ;  that  if  driven  from  one  kind  of 
work  they  would  turn  to  another ;  that  they  might  be  excited  by  stimulus 
to  increased  exertions,  and  so  far  he  remarks  upon  men  and  their  instincts  ; 
but  his  science  had  relation  chiefly  to  what  was  produced,  the  merchandise 
and  not  the  animals  by  which  it  was  produced.  His  attention  was  turned 
to  the  laborers  only  upon  the  point  of  greater  or  less  production.  In  the 
view  of  Say's  system,  the  steam-engine  was  not  regarded  differently  from 
the  engine  of  flesh  and  bones.  Now,  we  deny  that  it  is  possible  to  develop 
a  true  social  science  from  such  premises.  We  regard  it  as  an  absurdity  of 
the  extremest  kind.  Yet  it  is  claimed  by  some  that  this  science  is  com 
plete,  and  it  is  yet  the  system  mainly  taught  in  our  colleges.  It  professes  to 
lay  down  laws,  by  which  not  only  nations,  but  men,  are  to  be  governed  in 
some  of  the  most  important  concerns  of  life.  Yet  it  does  not  recognise 
man  as  a  moral  being.  It  knows  nothing  of  his  intellectual  or  of  his  moral 
wants,  desires  or  necessities.  It  does  not  profess  to  have  the  best  earthly 
interests  of  men  in  view  ;  it  recognises  nothing  of  the  kind.  It  is  as  pure 
materialism  as  ever  has  been  taught  in  any  form,  and  its  doctrines  have 
already  inflicted  more  injury  upon  human  society  than  any  false  doctrine 
of  modern  times,  socialism  in  all  its  branches  included.  We  take  the  ground, 
that  there  can  be  no  other  sound  basis  for  a  science  or  system  of  political 
economy  than  human  advantage,  taking  man  as  a  moral  and  intellectual, 
as  well  as  a  laboring  being.  The  labor,  the  production,  the  wealth,  treated 
heretofore  independently,  are  but  means  to  an  end.  To  develop  a  science 
from  secondary  elements  without  keeping  in  view  the  original  and  primary 
elements  of  consideration,  is  the  blunder  of  Say's  political  economy.  It  is 
as  if  the  science  of  the  apothecary  were  wholly  separated  from  the  science 
of  the  physician — as  if  the  whole  of  the  virtues  of  the  materia  medica  were 
to  be  settled  and  fixed  without  any  knowledge  of  man  or  his  diseases. 
See  extended  remarks  of  the  Editor  on  this  subject  at  the  opening  of  this 
volume.  —  [S.  C.j 


BOOK  IV.  — PUBLIC  POLICY. 


CHAPTER  I. 

INSULAR  SUPREMACY— THE  CONTINENTAL  POWERS— NORTH 
AMERICA  AND  FRANCE. 

IN  all  ages  there  have  been  cities  or  countries  surpassing  others 
in  manufactures,  trade  and  navigation ;  but  the  world  has  never 
witnessed  a  supremacy  to  be  compared  with  that  existing  in  our 
time.  In  all  ages  states  have  aspired  to  domination,  but  no  edifice 
of  power  has  ever  been  constructed  upon  so  broad  a  base.  How 
miserable  appears  the  ambition  of  those  who  attempted  to  estab 
lish  universal  domination  upon  the  power  of  arms,  in  comparison 
with  the  great  attempt  of  England  to  transform  her  whole  terri 
tory  into  an  immense  manufacturing  and  commercial  city,  into 
an  immense  port,  and  to  become  to  other  nations  what  a  vast 
city  is  to  the  country,  the  centre  of  arts  and  knowledge,  of  an 
immense  commerce,  of  opulence,  of  navigation,  of  naval  and 
military  power ;  a  cosmopolitic  country  supplying  all  nations 
with  manufactured  products,  and  asking  in  return  from  each 
country  its  raw  materials  and  commodities  ;  the  arsenal  of  exten 
sive  capital,  the  universal  banker,  regulating,  if  not  controlling 
the  circulating  money  of  the  whole  world,  and  making  all 
nations  tributary  to  her  by  loans  and  the  payment  of  interest. 

But  let  us  be  just  to  that  power  and  its  ambition.  Far  from 
having  been  stopped  in  its  progress  by  England,  the  world  has 
received  from  her  its  strongest  impulse.  She  has  served  as  a 
model  to  all  nations  in  her  internal  and  external  policy ;  in  her 
great  inventions  and  grand  enterprises  of  every  kind ;  in  the  ad- 

(437) 


438  PUBLIC    POLICY. 

vancement  of  the  useful  arts  ;  in  the  construction  of  roads,  rail 
ways  and  canals ;  in  the  discovery  and  cultivation  of  lands  in  a 
state  of  nature,  particularly  in  displaying  and  developing  the 
natural  wealth  of  tropical  countries  ;  and  in  the  civilization  of 
tribes,  savage  or  subsiding  into  barbarism.  Who  can  tell  how 
far  the  world  would  have  been  behind  if  there  had  been  no 
England  ?  And  if  England  even  now  should  cease  to  exist,  who 
can  say  how  far  mankind  would  retrograde  ?  We  may  rightly 
congratulate  ourselves  upon  the  rapid  progress  of  that  nation, 
and  may  pray  for  her  continued  prosperity.  But  should  we  de 
sire  to  have  her  build  upon  the  ruins  of  other  nations  an  univer 
sal  empire  ?  A  chimerical  cosmopolitism  or  a  narrow  mercantile 
spirit,  could  alone  answer  affirmatively.  We  have,  in  the  fore 
going  chapters,  sketched  the  consequences  of  such  a  denational 
ization,  and  shown  that  civilization  can  only  be  diffused  by  the 
elevation  of  other  nations  to  the  same  degree  of  culture, 
wealth,  and  power ;  that  the  same  path  by  which  England  has 
travelled  from  a  state  of  barbarism  to  her  actual  grandeur  is 
open  to  all  nations,  and  that  more  than  one  in  our  time  is  in 
vited  to  enter  it. 

The  maxims  of  state,  by  aid  of  which  England  has  become 
what  she  is  at  present,  may  be  reduced  to  the  following 
formulas : 

To  prefer  constantly  the  importation  of  productive  power  to 
that  of  commodities.* 

To  maintain  and  carefully  protect  the  development  of  pro 
ductive  power. 

To  import  only  raw  materials  and  agricultural  products,  and 
to  export  only  manufactured  articles. 

*  Even  the  production  of  wool  in  England  is  due  in  part  to  the  applica 
tion  of  this  maxim.  Edward  IV.  imported,  by  special  favor,  three  thousand 
sheep  from  Spain,  a  country  from  which  the  exportation  of  sheep  was  pro 
hibited,  and  divided  them  among  the  people,  with  orders  not  to  kill  or 
castrate  them,  or  any  of  their  increase,  for  seven  years.  When  the  object 
of  this  measure  had  been  attained,  England  responded  to  the  liberality  of 
the  Spanish  government  by  prohibiting  the  importation  of  Spanish  wool. 
The  effect  of  this  prohibition,  however  improper,  is  no  more  to  be  disputed 
than  the  prohibition  of  wool,  by  Charles  II.,  in  1672  and  1674. 


INSULAR    SUPREMACY.  439 

To  employ  in  founding  colonies  and  reducing  to  her  rule  bar 
barous  tribes,  only  the  surplus  of  her  productive  power. 

To  reserve  exclusively  for  the  mother  country  the  supplying 
the  colonies  and  conquered  territories  with  manufactured  articles  ; 
in  compensation  for  which  receiving  in  preference  their  raw 
materials  and  particularly  their  tropical  commodities. 

To  reserve  also  the  coasting  trade  and  the  navigation  between 
the  mother  country  and  colonies ;  to  encourage  maritime  fisheries 
by  the  aid  of  premiums ;  to  obtain  the  greatest  possible  share 
of  international  navigation. 

To  become  thus  the  chief  naval  power,  and  by  means  of 
that  supremacy  to  extend  her  external  commerce  and  enlarge 
constantly  her  colonial  establishments. 

To  grant  commercial  facilities,  whether  colonial  or  relating  to 
navigation,  only  to  such  extent  and  in  that  way  which  most 
favored  her  own  interest,  not  yielding  any  reciprocity  in  matters 
of  duties  upon  shipping,  except  when  the  advantage  was  on  the 
side  of  England,  or  as  a  mean  of  preventing  foreign  powers 
from  imposing  maritime  restrictions  for  their  own  benefit. 

Not  to  make  concessions  to  independent  nations,  except 
touching  the  importation  of  agricultural  products,  and  only  upon 
condition  of  analogous  concessions  relatively  to  the  exportation 
of  manufactured  products. 

When  such  concessions  could  not  be  obtained  by  way  of 
treaties,  to  attain  the  same  end  by  smuggling. 

To  declare  war  or  to  conclude  alliances  with  an  exclusive 
view  to  the  interests  of  manufactures,  commerce,  shipping,  and 
colonies ;  to  extract,  in  this  way,  profit  from  friends  and  foes ; 
from  the  latter,  by  interrupting  their  trade ;  from  the  former,  by 
ruining  their  manufactures  through  subsidies  and  loans,  paid  in 
the  products  of  her  manufactures. 

These  maxims  were  formerly  openly  avowed  by  all  her  minis 
ters  and  all  her  members  of  Parliament.  The  ministers  of 
George  I.  in  1721  frankly  declared  in  reference  to  the  prohibited 
introduction  of  the  manufactured  products  of  India,  that  a 
nation  could  not  become  rich  and  powerful  but  by  importing 
raw  materials  and  exporting  manufactured  products.  Even  as  late 


440  PUBLIC    POLICY. 

as  the  time  of  Lord  Chatham  and  Lord  North,  it  was  maintained 
without  hesitation  in  full  Parliament  that  North  America  should 
not  be  allowed  to  manufacture  a  single  nail. 

Since  the  time  of  Adam  Smith,  a  new  maxim  has  been  added 
to  those  mentioned :  to  dissemble  the  true  policy  of  England  by 
the  aid  of  cosmopolite  expressions  and .  discussions,  designed 
by  Adam  Smith  to  prevent  foreign  nations  from  imitating  her 
policy. 

It  is  a  vulgar  rule  of  prudence  for  him  who  has  reached  the 
pinnacle  of  power  to  cast  down  the  ladder  by  which  he  mounted, 
that  others  may  not  follow.  In  this  lies  the  secret  of  Adam 
Smith's  theory,  and  of  its  cosmopolite  tendencies ;  of  his  illus 
trious  contemporary,  William  Pitt,  as  well  as  of  all  his  successors 
in  the  government  of  Great  Britain.  A  nation  which  by  pro 
tective  duties  and  maritime  restrictions  has  built  up  a  manu 
facturing  industry  and  a  merchant  marine  to  such  a  point  of 
strength  and  power  as  not  to  fear  the  competition  of  any  other, 
can  pursue  no  safer  policy  than  to  thrust  aside  the  means  of 
elevation,  to  preach  to  other  nations  the  advantages  of  free 
trade,  and  to  utter  loud  expressions  of  repentance  for  having 
walked  hitherto  in  the  way  of  error,  and  for  having  come  so 
lately  to  the  knowledge  of  truth.  William  Pitt  was  the  first 
English  statesman  who  understood  the  use  that  could  be  made 
of  Adam  Smith's  cosmopolite  theory,  and  it  was  not  in  vain  that 
he  had  constantly  with  him  a  copy  of  the  Wealth  of  Nations. 
His  speech  of  1786,  addressed  evidently  not  to  the  Parliament 
or  the  people  of  his  country,  but  to  the  inexperienced  statesmen 
of  France,  and  intended  only  to  procure  their  assent  to  the 
treaty  of  Eden,  is  a  masterpiece  of  dialectics  in  Smith's  manner. 
France,  if  you  believe  him,  wras  naturally  destined  to  agricul 
ture  and  the  production  of  wine,  as  England  to  manufactures ; 
these  two  nations  were  in  the  position  of  two  great  merchants, 
trading  in  different  branches,  and  enriching  each  other  by  an 
exchange  of  their  merchandise.*  Not  a  word  of  the  old  English 

*  "  France,"  said  Pitt,  "  has  over  England  the  advantage  of  climate  and 
other  gifts  of  nature,  and  surpasses  her  in  the  production  of  raw  materials  ; 
but  England  surpasses  France  in  manufactured  products.  The  wines, 


INSULAR    SUPREMACY.  441 

maxim,  that  in  foreign  trade  a  nation  can  reach  the  highest 
degree  of  wealth  and  power  only  by  the  exchange  of  manufac 
tured  products  for  agricultural  products  and  raw  materials. 
This  maxim  has  been,  since  then,  ever  kept  as  a  State  secret  by 
England ;  it  ceased  to  be  openly  proclaimed,  but  was  all  the 
more  strictly  obeyed. 

If,  however,  since  the  time  of  William  Pitt  England  had,  in 
fact,  thrown  away  the  protective  system  as  a  crutch  no  longer 
needed,  she  would  have  attained  to  still  greater  wealth  and  emi 
nence,  she  would  have  been  nearer  the  object  aimed  at  —  the 
monopoly  of  manufacturing  industry.  The  most  favorable 
moment  for  attaining  that  end  was  evidently  the  epoch  of  the 
general  peace. 

The  hatred  which  the  continental  system  had  excited  had 
given*  way  to  cosmopolite  feelings  among  all  the  continental 
nations.  Russia,  all  Northern  Europe,  Germany,  the  Peninsula, 
the  United  States,  all  those  countries  would  have  deemed  them 
selves  fortunate  to  exchange  their  agricultural  products  and  their 
raw  materials  for  the  manufactured  commodities  of  England. 
Even  France  might  have  been  induced,  by  important  concessions 
to  the  interests  of  her  wine  and  silk,  to  abandon  prohibitions. 
The  time  had  come,  when,  as  Priestley  remarked  of  the  Act  of 
Navigation,  "it  would  have  been  as  wise  for  England  to  abolish 
the  system  of  protection  as  it  had  been  at  first  to  establish  it." 

Under  such  a  policy,  all  the  surplus  of  both  continents  in 
raw  materials  and  agricultural  productions  would  have  flowed 
into  England,  and  the  whole  world  would  have  been  clad  in  the 
product  of  English  looms ;  everything  would  have  concurred  to 

brandies,  oils,  and  vinegars  of  France,  especially  the  two  first-named  articles, 
are  of  so  much  importance,  and  so  much  value,  that  all  our  natural  wealth 
cannot  be  compared  with  them.  On  the  other  hand,  it  is  not  denied  that 
England  has  the  monopoly  of  certain  branches  of  manufactures,  and  that 
in  others  it  possesses  sufficient  advantages  to  brave  all  the  rivalry  of  France. 
That  is  the  condition  and  natural  basis  of  the  relations  between  the  two 
countries.  Each  one  having  important  commodities  peculiar  to  it,  and 
possessing  that  which  is  wanting  to  the  other,  they  are,  in  regard  to  one 
another,  like  two  great  merchants  operating  in  different  departments,  who 
do  each  other  mutual  service  by  exchanging  their  merchandise." 


442  PUBLIC    POLICY. 

increase  the  wealth  and  power  of  England.  The  idea  would 
scarcely  have  occurred  to  the  Americans  and  Russians  in  a 
century  of  adopting  a  system  of  protection,  and  to  the  Germans 
of  establishing  a  Customs-Union.  They  could  not  readily  have 
resolved  upon  giving  up  the  advantages  of  the  actual  moment  for 
the  hopes  of  a  distant  future.* 

*  It  would  clearly  have  been  in  accordance  with  the  doctrine  of  free 
trade,  and  of  the  School,  if  all  nations  had  resorted  to  England  for  their 
manufactured  products  at  the  period  of  the  general  peace  in  1815.  England 
was  then  manufacturing  most  articles  of  general  consumption  much  cheaper 
than  any  other  country  ;  it  was  therefore,  according  to  theory,  the  place  for 
all  to  resort.  If  all  had  purchased  there,  the  inevitable  result  would  have 
been  a  general  rise  of  prices  in  England.  No  one  can  deny  that  the  whole 
history  of  commerce  proves  that  a  greatly  increased  demand  is  followed  by 
greatly  increased  prices.  The  longer  the  nations  of  the  world  would  con 
tinue  to  resort  to  England  for  manufactured  products,  the  more  dependent 
would  they  become,  and  the  more  would  they  be  at  the  mercy  of  English 
merchants  in  regard  to  price.  In  these  circumstances,  England  would  soon 
cease  to  be  a  cheap  market.  The  consumption  by  foreign  countries  of  the 
products  derived  from  England  would  then  not  only  be  limited  by  high 
price,  but  by  the  fact  that  these  countries  could  only  consume  to  the  extent 
that  England  would  take  their  products.  England  could,  for  instance,  take 
the  cotton  of  the  United  States,  and  upon  the  occasional  failure  of  her 
harvests,  she  could  take  some  of  our  flour  and  grain  ;  but  our  consumption 
of  woollen  and  cotton  goods,  of  iron,  and  other  English  manufactures, 
would  be  limited  to  what  England  would  or  could  take  from  us  in  payment. 
In  such  circumstances,  it  cannot  be  doubted,  that  some  addition  would  be 
made  to  our  exports  to  England.  Wool  would  probably  become  an  article 
of  export.  But  if,  upon  this  supposition,  England  had  become  the  chief 
manufacturer  of  the  world,  then  all  nations  would  have  become  producers 
of  raw  materials,  and  the  English  market  would  have  been  overstocked, 
and  the  prices  of  raw  materials  would  have  been  dictated  chiefly  by  the 
buyers.  With  all  the  increase,  however,  of  English  manufacturers,  any 
reduction  of  price  would  not  have  been  probable,  because  England  would 
have  had  no  competitor ;  the  consumption  of  English  goods  would  have 
mainly  depended  on  the  ability  of  each  nation  to  pay  in  England.  In  the 
case  of  this  country,  our  exports  to  England  could  have  but  little  exceeded 
their  present  value ;  for,  however  more  considerable  in  quantity,  the  price 
would  have  been  less ;  our  consumption  would,  therefore,  have  been  limited 
by  our  ability  to  pay.  And,  in  fact,  the  limit  of  all  international  trade  is 
not  merely  the  ability  of  each  nation  to  export,  but  the  willingness  of  each 
nation  to  take,  and  the  ability  of  each  nation  to  pay.  The  people  of  the 


INSULAR    SUPREMACY.  443 

But  it  has  not  been  given  to  trees  to  grow  up  to  the  skies. 
Lord  Castlereagh  surrendered  the  commercial  policy  of  England 

United  States,  unwilling  to  become  wholly  dependent  upon  England  foi 
such  manufactured  articles  as  she  could  make  cheap,  built  up,  even  with 
inadequate  protection,  their  own  manufactures,  and  realized  a  truth  to 
which  the  reigning  School  is  an  utter  stranger,  that  a  nation  can  afford  to 
consume  three  or  four  times  the  quantity  of  that  which  is  manufactured  at 
home,  even  at  much  higher  prices  than  the  corresponding  foreign  article. 
The  domestic  manufacturer  is  a  consumer  of  everything  that  is  produced 
at  home,  and  can  be  paid  in  every  kind  of  domestic  production.  The  peo 
ple  of  the  United  States  have,  therefore,  under  their  present  system,  been 
nearly  as  large  importers  from  England,  as  they  could  have  been  in  the 
case  supposed;  but  they  have,  at  the  same  time,  consumed  domestic 
cotton  and  woollen  goods,  iron,  &c.,  which  would  not  have  been  manu 
factured  under  absolute  free  trade,  in  quantities  more  than  three  times 
greater  than  the  quantity  actually  imported.  The  annual  product  of  the 
manufactures  of  the  United  States,  which  have  grown  up  under  favor  of 
protective  duties,  exceeds  the  whole  of  our  foreign  trade  by  a  large  amount ; 
the  consumption  of  domestic  manufactures  is  nearly  all  additional  to  what 
the  country  could  have  consumed,  if  wholly  dependent  upon  foreign  sup 
plies. 

The  following  figures  exhibit  how  this  would  have  stood  in  1850  :— 

Domestic.  Imported. 

Cotton  manufactures $61,169,000 $22,164,000 

Woollen  manufacture    43,207,000 17,151,000 

Iron,  pig,  castings,  and  wrought 60,488,000 17,500,000 

Manufactures  of  all  kinds $1,013,336,000  ....  $178,138,000 

It  may  be  seen  from  this  how  important  the  manufactures  of  the  country 
are,  compared  with  the  foreign  trade.  Of  the  imports  of  1850,  a  very  large 
amount  consisted  in  coffee,  tea,  and  other  products  not  manufactured.  The 
people  of  this  country  now  consume  at  least  five  times  as  much  of  their 
own  manufactured  products  as  they  do  of  corresponding  articles  manufac 
tured  abroad.  In  other  words,  we  consume  of  our  own  manufactures  to 
the  value  of  forty-four  dollars  per  head  of  the  population  of  the  whole 
country :  but  we  consume  foreign  manufactures  to  an  amount  less  than 
seven  dollars  for  each  head. 

The  amount  of  foreign  manufactured  products  consumed  by  any  nation 
can  never  much  exceed  this  rate,  where  the  nations  are  remote  from  each 
other.  Great  Britain  trades  with  many  countries  very  nearly  on  the  foot 
ing  of  free  trade,  but  these  nations  do  not  receive  her  manufactures  in 
greater  proportion  to  the  population  than  the  United  States.  England  ex 
ports  to  Portugal  to  the  value  of  about  one  dollar  and  a  half  for  each  head 


444  PUBLIC    POLICY. 

to  the  land  aristocracy,  and  the  latter  killed  the  goose  which 
was  laying  golden  eggs.  If  the  English  manufacturers  had  been 
permitted  to  rule  in  all  markets,  and  if  Great  Britain  had  assumed 
toward  the  world  the  part  of  a  manufacturing  city  towards 
the  country,*  the  whole  face  of  the  Island  would  have  been 
covered  with  houses  and  manufactories,  or  used  as  parks,  kitchen- 
gardens,  orchards,  or  applied  either  to  the  production  of  milk 
and  meat,  or  to  those  modes  of  culture,  in  a  word,  which  are 
only  practised  in  the  neighborhood  of  large  cities.  Those  cul 
tures  would  have  become  for  English  agriculture  much  more 
lucrative  than  that  of  grain,  and  would,  in  the  course  of  time, 
have  increased  the  income  of  the  aristocracy  much  more  than 
the  prohibition  of  foreign  corn.  But  that  aristocracy,  alive 
only  to  the  interests  of  the  moment,  preferred,  by  the  aid  of  the 
corn-laws,  to  uphold  their  land  rents  at  the  high  rate  to  which 
they  had  been  carried  by  the  exclusion  of  foreign  corn  and  raw 
materials,  during  the  war ;  and  they  compelled  the  conti 
nental  nations  by  this  step  to  seek  their  prosperity  in  other 

of  the  population  ;  and  very  few  nations  take  in  a  larger  proportion  except 
distributing  countries,  which  mainly  re-export  the  goods  they  import  from 
Great  Britain  ;  as  for  instance,  Holland  and  the  Hanse  Towns.  The  United 
States,  Jiowever,  import  British  manufactures  for  their  own  consumption, 
to  the  extent  of  three  and  a  half  dollars  for  each  head  of  the  population. 
The  manufacturing  power  of  this  country,  and  the  capital  acquired  by  it, 
now  adds  greatly  to  the  importance  of  its  foreign  trade.  —  [S.  C.] 

*  It  is  to  be  seen  whether  this  enormous  and  exclusive  development  of 
manufacturing  industry  has  been  an  advantage  for  England.  List  is  of 
opinion,  as  we  have  seen,  that  prosperity  depends  upon  a  parallel  and 
harmonious  development  of  all  branches  of  industry. —  [H.  R.] 

The  inordinate  development  of  English  manufacturing  industry  in  the 
last  half  century  is  now  being  followed  by  equal,  if  not  greater,  im 
provements  in  their  agriculture.  This  will,  in  time,  remedy  serious  diffi 
culties  arising  from  the  disproportionate  development  of  manufactures. 
The  manufacturing  population,  which  is  wholly  or  largely  dependent  on 
foreign  markets  for  a  sale  of  its  products,  must  encounter  great  hazards 
from  the  fluctuations  in  price  and  demand  which  ar^  incident  to  all  inter 
national  trade.  The  producers  who  exchange  their  commodities  on  the 
same  territories,  can  maintain  very  great  regularity  in  their  business ;  but 
the  markets  which  are  ruled  by  foreign  trade  are  always  liable  to  the 
extremes  of  fluctuation.  —  [S.  C.] 


INSULAR    SUPREMACY.  445 

ways  than  by  the  free  exchange  of  their  agricultural  products 
for  the  manufactured  articles  of  England,  that  is,  by  the  estab 
lishment  of  manufactures.  The  prohibitive  laws  of  England 
thus  operated  exactly  like  Napoleon's  continental  system,  only 
more  slowly. 

When  Canning  and  Huskisson  came  into  power,  the  land  aris 
tocracy  had  tasted  too  fully  of  the  fruits  of  prohibition  to  allow 
themselves  to  be  persuaded  to  renounce  such  advantages.  Those 
statesmen,  like  the  English  ministers  of  our  time,  were  asked 
to  solve  a  problem  that  was  insoluble, — to  convince  the  continental 
nations  of  the  advantages  of  her  trade,  and  to  maintain  in 
flexibly,  for  the  benefit  of  their  own  aristocracy,  the  existing  re 
strictions  upon  foreign  agricultural  productions.  They  found  it 
of  course  impossible  to  satisfy  the  hopes  of  the  partisans  of  free 
trade  in  both  continents.  Amidst  this  deluge  of  philanthropical 
and  cosmopolite  phrases  which  were  uttered  in  the  general  dis 
cussions  upon  commercial  systems,  they  did  not  see  any  incon 
sistency,  when  a  modification  of  the  English  tariff  was  under 
consideration,  in  basing  their  arguments  upon  the  protective 
system. 

Huskisson  reduced  the  duties  upon  many  articles,  but  never 
failed  to  show  that  even  with  a  more  moderate  tariff,  the  manu 
factures  of  the  country  would  be  sufficiently  protected.  In  this, 
he  followed  closely  the  mode  of  administering  the  dikes  in 
Holland :  where  the  water  attains  a  great  height,  the  dikes 
are  built  to  correspond,  and  where  the  water  does  not  rise,  neither 
does  the  dike.  The  reform  of  the  mercantile  system,  so  pomp 
ously  announced,  is  reduced  to  mere  economical  juggling. 
The  reduction  of  the  duties  on  silks  has  been  pointed 
out  as  evidence  of  English  liberality,  not  reflecting  that 
England,  in  the  interest  of  her  treasury  and  without  prejudice 
for  her  silk  manufactures,  merely  intended  to  stop  the  smug 
gling  which  was  carried  on  in  that  article,  an  object  which  was 
fully  attained.  But  if  a  protective  duty  of  fifty  or  seventy  per 
cent.,  the  duty  yet  charged,  including  the  additional  tax  upon 
foreign  silk  in  England,  can  be  alleged  as  a  proof  of  liberality, 


446  PUBLIC    POLICY. 

other  nations  would  in  this  respect  be  rather  in  advance  of 
than  behind  England. 

The  demonstrations  of  Canning  and  Huskisson  having  been 
chiefly  intended  to  make  an  impression  in  France  and  North 
America,  it  will  not  be  uninteresting  to  notice  how  they  were 
foiled  in  both  countries. 

The  English  had  still  in  France,  as  they  had  in  1786,  many 
partisans  among  the  theorists  and  liberals.  Seduced  by  the 
grand  idea  of  free  trade,  and  by  Say's  superficial  reasoning, 
struggling  with  a  detested  government,  sustained  by  the  maritime 
districts,  the  producers  of  wine,  and  the  manufacturers  of  silk, 
the  liberal  party  claimed  with  earnestness,  as  in  1786,  an  exten 
sion  of  trade  with  England,  as  the  true  and  only  mode  of  de 
veloping  the  prosperity  of  the  country. 

Whatever  the  reproaches  to  which  the  Restoration  is  liable,  it 
nevertheless  rendered  to  France  one  service  which  cannot  be 
forgotten,  and  which  posterity  will  never  dispute ;  the  govern 
ment  did  not  allow  itself  to  be  influenced  by  the  intrigues  of 
England,  nor  by  the  declamations  of  the  liberals  in  matters  of 
commercial  policy.  Canning  had  the  interests  of  England  so 
much  at  heart,  that  he  betook  himself  to  Paris,  to  convince  the 
Minister  de  Villele  of  the  wisdom  of  free  trade,  and  to  induce 
him  to  imitate  England.  But  de  Villele  was  too  practical  a  man 
not  to  penetrate  the  stratagem ;  it  is  said  that  his  answer  to 
Canning  was  in  substance : — "  If  England,  in  the  progressive  state 
of  her  industry,  admits  foreign  competition  more  extensively  than 
formerly,  such  a  policy  is  in  conformity  with  her  well-understood 
interest ;  but  it  is  the  well-understood  interest  of  France  now 
to  grant  to  her  own  manufactures,  of  which  the  development  is 
yet  imperfect,  the  protection  which  is  still  indispensable  for 
them.  When  the  time  shall  arrive  that  foreign  competition  will 
be  useful  for  French  industry,  France  will  not  fail  to  avail 
herself  of  the  present  example  of  England." 

Chagrined  by  this  refusal,  Canning  on  his  return  boasted  in 
full  Parliament  of  having  attached  a  stone  to  the  neck  of  the 
French  government  by  his  intervention  in  Spain  ;  a  proof  that 
Canning's  cosmopolitan  spirit  and  European  liberalism  were  not 


INSULAR    SUPREMACY.  447 

quite  so  sincere  as  he  had  credit  for  with  the  honest  liberals  of 
the  Continent !  for  if  the  case  of  liberalism  upon  the  Continent 
had  been  of  the  slightest  interest  in  the  world  to  him,  how  could 
Canning  have  abandoned  the  liberal  constitution  of  Spain  to 
French  intervention,  for  the  mere  purpose  of  hanging  a  stone 
round  the  neck  of  the  French  government  ?  The  truth  is  that 
Canning  was  an  Englishman  in  the  fullest  meaning  of  the  term, 
and  that  he  entertained  philanthropical  and  cosmopolite  ideas 
only  so  far  as  they  served  to  strengthen  and  extend  the  indus 
trial  and  commercial  supremacy  of  England,  or  to  mislead  rival 
nations. 

It  required  no  great  penetration  in  de  Villele  to  discover  the 
stratagem  of  Canning.  The  experience  of  a  neighboring  coun 
try,  Germany,  the  industry  of  which,  after  the  abolition  of  the 
continental  system,  had  not  ceased  to  retrograde,  furnished  him 
a  convincing  proof  of  the  real  value  of  the  doctrine  of  free  trade 
as  it  was  understood  in  England.  Moreover,  France  found  too 
much  benefit  from  the  system  she  had  adopted  in  1815  to  suffer 
herself  to  be  tempted,  like  the  dog  in  the  fable,  to  drop  the  flesh 
and  take  up  the  shadow.  The  most  liberal  in  matters  of  indus 
try,  such  as  Chaptal  and  Charles  Dupin,  had  expressed  them 
selves  in  a  manner  not  in  the  least  equivocal  as  to  the  results  of 
that  system. 

Chaptal's  work  on  French  industry  is  mainly  an  apology  for 
the  commercial  policy  of  France,  and  a  statement  of  its  general 
and  special  results.  Its  tendency  is  shown  in  the  following 
passage  taken  from  that  work :  — 

"  So  instead  of  losing  ourselves  in  a  labyrinth  of  metaphysical 
abstractions,  let  us  keep  what  we  have  and  try  to  improve  it." 

"  Sound  commercial  legislation  is  the  true  safeguard  of  agri-r 
cultural  and  manufacturing  industry;  it  increases  or  diminishes 
duties  upon  imports  according  to  circumstances  and  wants ;  they 
compensate  the  disadvantage  to  which  our  own  manufactures 
may  be  subject  in  the  different  prices  of  labor  or  fuel ;  they  pro 
tect  infant  arts  by  prohibitions,  to  save  them  from  foreign  com 
petition,  until  they  shall  have  made  that  progress  which  enables 
them  to  withstand  competition  ;  they  tend  to  establish  the  indus- 


448  PUBLIC    POLICY. 

trial  independence  of  France,  and  to  enrich  her  by  the  indivi 
dual  labor  of  the  people,  which,  as  I  have  frequently  said,  is  the 
chief  source  of  wealth." — [Vol.  II.,  p.  417.] 

Charles  Dupin,  in  his  work  on  the  productive  power  of  France 
and  the  progress  of  French  industry  from  1814  to  1827,  had  so 
ably  sketched  the  effects  of  the  commercial  policy  of  France 
since  the  Restoration,  that  a  French  minister  could  never  have 
dared  to  sacrifice  the  creation  of  half  a  century,  so  dearly  bought, 
so  rich  in  results,  and  so  full  of  hopes,  at  the  price  of  a  treaty 
like  that  of  Methuen,  and  its  necessary  results. 

The  American  tariff  of  1828  was  a  natural  and  necessary 
consequence  of  the  commercial  system  of  England,  a  system  that 
rejected  the  timber,  the  corn,  the  flour,  and  other  raw  materials 
of  the  United  States,  and  admitted  only  their  cotton  in  exchange 
for  English  manufactured  articles. 

Thus  the  trade  with  England  was  only  profitable  for  the  agri 
cultural  labor  of  American  slaves  ;  the  freest,  the  most  civilized, 
and  the  most  powerful  States  of  the  Union  were  arrested  in 
their  material  progress  and  reduced  to  send  their  annual  surplus 
of  population  and  capital  to  the  solitudes  of  the  West.  Huskis- 
son  understood  perfectly  this  state  of  things  ;  it  was  known  that 
the  English  minister  at  Washington  had  more  than  once  warned 
him  of  the  consequences  which  would  ensue  from  the  policy  of 
England.  If  Huskisson  had  been  the  man  he  had  been  repre 
sented  to  be  abroad,  he  would  have  seized  the  occasion  happily 
offered  him  by  the  American  tariff,  to  make  the  English  aris 
tocracy  comprehend  the  absurdity  of  their  own  laws  and  the 
necessity  of  their  repeal.  But  what  did  Huskisson  ?  He  flew  into 
a  passion  against  the  Americans,  or  affected  to  do  so ;  in  the 
warmth  of  his  feeling  he  made  assertions,  the  incorrectness  of 
which  was  known  to  every  American  planter,  and  uttered  threats, 
which  merely  made  him  ridiculous.  Huskisson  asserted  that  the 
exports  of  England  to  the  United  States  formed  hardly  the 
sixth  part  of  her  total  exports,  whilst  those  of  the  United 
States  to  England  made  one-half  of  theirs.  He  intended  to 
prove  by  this  that  the  United  States  were  more  dependent  upon 
England  than  England  was  upon  the  United  States,  and  that 


INSULAK    SUPREMACY.  449 

England  had  much  less  to  fear  from  interruption  of  this  com 
merce,  whether  by  war  or  by  non-intercourse. 

If  the  figures  of  the  imports  and  exports  be  regarded,  Mr. 
Huskisson's  reasoning  appears  at  least  plausible  ;  but  if  we  con 
sider  the  nature  of  the  respective  shipments,  we  do  not  understand 
how  Huskisson  could  use  an  argument  which  proves  just  the 
contrary  of  what  he  wished  to  establish.  The  exports  from  the 
United  States  to  England  consist  in  whole  or  in  the  greatest 
part  of  raw  materials,  the  value  of  which  is  increased  ten-fold, 
which  she  could  neither  dispense  with  nor  obtain  from  other  coun 
tries,  at  least  in  sufficient  quantities ;  whilst  all  the  importations 
of  the  United  States  from  England  consist  of  articles  which  they 
could  either  manufacture  themselves  or  buy  from  other  countries. 
If  we  consider  then  the  consequences  of  an  interruption  of  the 
commerce  between  the  two  countries  in  the  light  of  the  theory 
of  values,  they  appear  as  if  wholly  disadvantageous  to  the  United 
States,  whilst,  being  estimated  by  the  theory  of  productive 
power,  they  would  exhibit  an  enormous  loss  for  England.  For 
beyond  doubt  such  an  event  would  ruin  two-thirds  of  the  cotton 
manufactures  of  the  latter ;  England  would  lose,  as  in  a  moment, 
an  industry,  the  annual  value  of  which  exceeds  greatly  the 
collective  value  of  her  exports.  The  effects  of  such  a  loss  upon 
the  tranquillity,  the  wealth,  the  credit,  the  trade,  and  the  power 
of  England,  cannot  be  estimated.  What  would  be,  on  the  con 
trary,  the  effects  of  the  interruption  of  this  trade  upon  the 
United  States?  Compelled  to  manufacture  the  articles  they 
imported  before  that  time  from  England,  they  would  earn  in  a 
few  years  what  England  would  have  lost.  No  doubt,  but  as  of 
old,  between  England  and  Holland  after  the  Act  of  Navigation, 
a  struggle  to  the  death  might  follow;  and  that  struggle 
might,  perhaps,  have  a  result  like  that  of  which  the  English 
Channel  was  formerly  the  theatre.  It  is  not  the  time  to  sketch 
minutely  the  consequences  of  a  rivalry  which  soon  or  late  must 
occur.  The  preceding  may  suffice  to  evince  the  want  of 
solidity  and  the  danger  of  Huskisson's  reasoning ;  to  show  the 
imprudence  of  England  in  compelling  the  people  of  the 
United  States  by  her  corn  laws  to  become  manufacturers; 
29 


450  PUBLIC    POLICY. 

and  how  skilful  it  had  been  in  Huskisson,  if,  instead  of  playing 
with  frivolous  and  perilous  discussions,  he  had  applied  himself 
to  remove  the  causes  which  led  to  the  American  tariff  of  1828. 

To  exhibit  to  the  United  States  the  advantages  of  their  com 
merce  with  England,  Huskisson  signalized  the  extraordinary  in 
crease  of  their  exportations  of  cotton :  but  the  Americans  knew 
the  value  of  this  new  argument.  For  more  than  ten  years  the 
production  of  cotton  in  North  America  had  so  exceeded  the 
annual  consumption,  that  prices  diminished  in  nearly  the  same 
proportion  as  the  exportation  had  increased,  so  that  after  having 
received  in  1816  twenty-four  millions  of  dollars  for  eighty 
millions  of  pounds  of  cotton,  the  Americans  obtained  in  1826 
but  twenty-five  millions  of  dollars  for  two  hundred  and  four 
millions  of  pounds. 

Finally,  Huskisson  threatened  the  Americans  with  the  orga 
nization  upon  a  large  scale  of  contraband  trade  through 
Canada.  It  is  a  fact,  that  in  the  actual  state  of  things,  this 
measure  would  have  been  the  greatest  impediment  which  the 
protective  system  could  have  encountered  in  the  United  States. 
But  what  is  the  conclusion  ?  That  the  Americans  ought  to  lay 
their  tariff  at  the  feet  of  the  British  government,  and  humbly 
wait  for  the  decisions  which  the  latter  may  please  to  make  year 
by  year  upon  the  subject  of  this  industry  ?  Certainly  not ! 
The  consequences  would  only  be  that  the  Americans  would  annex 
the  Canadas,  or,  at  least,  aid  them  to  become  independent  when 
ever  Canadian  smuggling  should  have  become  intolerable.  But 
is  it  not  the  height  of  folly  in  a  nation  enjoying  industrial  and 
commercial  supremacy,  to  compel  an  agricultural  people,  closely 
connected  by  ties  of  relationship,  language,  and  interest,  to 
become  a  manufacturing  rival,  and  to  oblige  it,  by  obstructing 
its  natural  impulses,  to  become  interested  in  the  rebellion  of  her 
own  colonies  ? 

After  the  death  of  Huskisson,  Mr.  Poulett  Thompson  took 
the  direction  of  commercial  affairs  in  England.  He  persevered 
in  the  policy  of  his  illustrious  predecessor.  However,  so  far  as 
concerned  North  America,  there  was  little  left  for  him  to  do ; 
for  in  that  country,  without  the  intervention  of  an  English  minis- 


INSULAR    SUPREMACY.  451 

try,  the  influence  of  the  cotton  planters  and  importers,  and  the 
force  of  party-discipline,  had  already  brought  about,  in  1832, 
what  has  been  called  the  Compromise  Act,  an  act  which,  while 
correcting  the  exaggerations  and  the  vices  of  the  preceding 
tariff,  and  leaving  yet  to  the  manufacturers  of  cotton  goods  a 
tolerable  protection,  made  to  the  English,  as  to  the  future,  all 
the  concessions  they  could  ask  without  any  corresponding  con 
cessions  from  them.  Since  that  time  the  exports  from  England 
to  the  United  States  have  increased  prodigiously,  and  so  much 
exceeded  at  all  times  the  importations  from  that  country,  that  it 
is  now  in  the  power  of  England  to  draw  from  the  United  States 
in  time  of  her  own  need,  any  desired  quantity  of  the  precious 
metals,  as  the  banks  must  meet  the  demand :  and  to  produce  in 
that  country  a  commercial  crisis,  under  the  operation  of  which, 
both  cotton  and  corn  can  be  had  at  the  lowest  rates.  What  is 
most  surprising  is,  that  the  Compromise  Act  had  for  its  author  the 
ablest  defender  and  the  most  enlightened  friend  of  manufac 
turing  industry — Henry  Clay.  The  prosperity  of  the  manu 
factures  under  the  tariff  of  1828  had  so  strongly  excited  the 
jealousy  of  the  cotton  planters,  that  the  Southern  States  threatened 
a  rupture  of  the  Union,  unless  the  tariff  of  1828  were  modified. 
The  government  of  the  United  States,  under  democratic  rule, 
had  from  party  considerations,  and  with  a  view  to  the  Presidency, 
taken  part  with  the  planters  of  the  South,  and  had  arrayed  on 
the  same  side  the  agricultural  democrats  of  the  Central  and 
Western  States.  With  the  latter,  the  elevation  of  prices, 
mostly  produced  by  the  prospering  manufactures  of  the 
country,  and  the  construction  of  canals  and  rail-roads,  had 
cooled  their  former  sympathy  for  the  manufacturing  interests ; 
they  feared,  moreover,  that  the  Southern  States  might  carry 
their  opposition  even  to  an  effective  dissolution  of  the  Union, 
and  to  civil  war.  It  suited  the  designs  of  the  Northern  demo 
crats  to  secure  the  good  will  of  those  of  the  South.  On 
all  these  accounts,  public  opinion  was  so  favorably  disposed 
for  free  trade  with  England,  that  a  complete  abandonment  of  the 
manufacturing  interests  of  the  country  was  apprehended.  In 
such  circumstances,  Henry  Clay's  Compromise  Act  appeared 


452  PUBLIC    POLICY. 

to  be  the  only  way  of  saving,  at  least  for  a  time,  the  protective 
system.  A  portion  of  American  industry,  the  manufacture  of 
articles  of  luxury,  and  high-priced  commodities,  was  sacrificed 
to  foreign  competition,  to  save  another  part,  the  manufacture  of 
common  articles,  and  the  cheaper  goods. 

Every  thing  indicates,  however,  that  in  the  course  of  years, 
the  protective  system  will  again  raise  its  head  in  the  United 
States,  and  become  a  settled  policy.  Whatever  may  have 
been  the  exertions  of  the  English  to  diminish,  or  to  temper  the 
commercial  revulsions  in  the  United  States,  and  however  con 
siderable  the  capital  they  send  thither  in  the  purchase  of  public 
stocks  and  securities,  or  in  the  way  of  emigration,  the  want 
of  equilibrium,  ever  subsisting  and  continually  increasing  be 
tween  the  value  of  the  exports  and  imports,  and  which  can 
never  be  re-established  in  that  manner ;  the  consequent  formi 
dable  revulsions  and  their  increasing  violence,  cannot  fail  at 
last  to  awaken  Americans  to  a  full  knowledge  of  the  causes  of 
the  evil,  and  make  them  willing  to  apply  the  proper  remedy. 

It  is  in  the  nature  of  things  that  the  number  of  the  partisans 
of  protection  must  increase,  and  that  the  partisans  of  free  trade 
must  diminish. 

Down  to  our  time  the  increasing  demand  for  food,  occasioned 
by  the  former  prosperity  of  manufactures,  by  the  construction 
of  important  public  works,  and  by  the  great  augmentation  in 
the  production  of  cotton,  and  partly  also  by  bad  crops,  have 
kept  agricultural  productions  at  very  high  prices.  But  it  may 
be  foreseen  with  certainty,  that  in  the  course  of  not  many  years, 
these  prices  must  fall  below  the  average,  as  much  as  they  have 
hitherto  exceeded  it.  Since  the  Compromise  Act,  the  surplus 
of  American  capital  has  been  diverted  mostly  to  agriculture, 
and  begins  to  yield  results.  Thus,  whilst  the  production  of 
agricultural  commodities  has  been  enormously  increased,  the  de 
mand  has,  on  the  other  hand,  enormously  diminished;  first, 
because  public  works  are  no  longer  in  progress  on  the  same 
scale  as  formerly ;  secondly,  because  foreign  competition  stops 
the  development  of  the  manufacturing  population ;  thirdly,  be 
cause  the  production  of  cotton  has  so  much  exceeded  the  con- 


INSULAR    SUPREMACY.  453 

sumption,  that  planters  have  been  obliged  to  produce  themselves 
the  food  they  formerly  obtained  from  the  Middle  and  Western 
States.  If,  moreover,  rich,  abundant  crops  occur,  the  Middle 
and  Western  States  will  be  glutted  with  their  own  commodities, 
as  they  were  before  the  tariff  of  1828.  The  same  causes  pro 
ducing  the  same  effects,  the  agriculturists  of  the  Centre  and  of 
the  East,  will  again  perceive  that  the  increase  of  the  manufac 
turing  population  of  a  country  can  alone  increase  the  demand 
for  agricultural  products,  and  that  this  increase  can  only  be  the 
result  of  a  development  of  the  protective  system.  At  the  same 
time  that  the  protectionist  party  thus  gains  in  number  and  influ 
ence,  the  adverse  party  must  diminish  in  a  like  proportion ;  for 
the  cotton-planters,  in  a  different  position,  cannot  fail  to  discover 
that  it  is  their  undoubted  interest  to  promote  the  growth  of 
the  manufacturing  population  of  the  country,  and  to  enlarge  the 
demand  for  agricultural  commodities  and  raw  materials. 

The  cotton-planters  and  certain  party-men  of  the  United 
States,  having,  as  we  have  shown,  worked  with  the  most  ardent 
zeal  for  the  commercial  interests  of  Great  Britain,  Poulett 
Thompson  had  no  occasion  for  the  display  of  his  patriotism  or 
his  diplomatic  skill. 

In  France,  things  took  a  different  turn.  There  the  prohibi 
tive  system  was  adhered  to.  It  is  true  that  many  theorists, 
functionaries,  and  deputies,  were  favorable  to  the  extension  of 
commercial  intercourse  between  England  and  France ;  the  alli 
ance  existing  between  the  two  countries  had  given  some  popu 
larity  to  that  opinion ;  but  they  did  not  agree  upon  the  means 
of  attaining  the  end,  and  clear  ideas  did  not  appear  to  exist. 
It  appeared  evident  and  indisputable  that  the  increase  of  duties 
upon  food  and  raw  materials,  as  well  as  the  exclusion  of  English 
coal  and  iron,  were  very  injurious  to  French  industry,  and  that 
a  large  export  of  wine,  brandy,  and  silk  goods,  would  be  very 
advantageous  to  the  country. 

Farther  than  this,  they  dealt  in  vague  declamations,  or  upon 
the  inconveniences  of  the  prohibitive  system.  But  they  did  not 
deem  it  prudent  to  touch  it,  at  least  immediately.  The  govern 
ment  of  July,  found  its  principal  friends,  the  wealthy  and 


454  PUBLIC    POLICY. 

intelligent  bourgeois,  largely  interested  in  great  industrial 
enterprises. 

It  was  at  that  time  that  Poulett  Thompson  conceived  the  plan 
of  a  campaign,  which  does  honor  to  his  cunning  and  dexterity, 
as  a  minister  and  diplomatist.  He  sent  to  France  a  learned 
man,  very  well  versed  in  the  commerce,  industry,  and  commer 
cial  politics  of  that  country,  and  also  well  known  as  a  man  of 
liberal  opinions,  Dr.  Bowring.  This  gentleman  travelled  over 
all  France  and  Switzerland,  to  gather  on  the  spot  materials  to 
serve  as  arguments  against  the  protective  system,  and  in  favor 
of  free  trade.  He  performed  his  mission  with  that  skill  and 
ability  which  characterize  him.  He  gave  special  attention  to  the 
advantages  of  free  trade  between  the  two  countries,  in  exchanging 
coal  and  iron  for  wine  and  spirits.  In  his  published  report,  the 
argument  refers  almost  solely  to  these  articles ;  on  other  branches 
of  industry,  he  confines  himself  to  statistics,  without  trying  to 
show  how  free  trade  with  England  could  develop  them,  and  with 
out  making  any  proposition  in  regard  to  them. 

In  this  Dr.  Bowring  conformed  to  the  instructions,  drawn  up 
by  Poulett  Thompson,  with  rare  ability,  and  since  published  at 
the  head  of  his  report.  Thompson  puts  forth  in  them  the  most 
liberal  opinions,  and  exhibits  much  concern  for  the  manu 
facturing  interests  of  France.  He  thinks  it  very  improbable 
that  great  results  can  be  anticipated  from  the  projected  nego 
tiations.  Those  instructions  were  well  calculated  to  allay  the 
apprehensions  of  the  powerful  interests  of  the  French  cotton 
and  woollen  industry,  as  to  the  intentions  of  England.  Accord 
ing  to  Thompson,  it  would  be  useless  for  England  to  ask  large 
concessions.  He  insinuates  that  there  might  be  more  hope  of 
success  in  regard  to  articles  of  less  importance.  These  articles 
of  less  importance  are  not  designated  in  the  instructions,  but 
the  experience  of  France  has  amply  revealed  what  was  meant 
by  these  words.  It  was  then  proposed  to  open  the  French  mar 
kets  to  the  flax,  threads,  and  linens  of  England. 

The  French  government,  touched  with  the  observations  of  the 
English  ministry  and  their  agents,  and  desirous  of  granting  to 
England  a  favor  of  so  little  importance,  and  one  in  the  end  so 


INSULAR    SUPREMACY.  455 

advantageous  to  France,  reduced  the  duties  upon  flax,  thread, 
and  linens,  to  such  an  extent  that,  considering  the  remarkable 
progress  made  by  the  English  in  those  manufactures,  they  ceased 
to  protect  French  industry.  The  export  thereupon  of  those 
articles  from  England  to  France  in  the  following  years  increased 
prodigiously,  until  it  reached  thirty-eight  millions  of  francs  in 
1838  ;  and  France,  surpassed  in  that  manufacture  by  England, 
hazarded  the  entire  loss  of  an  industry,  the  yearly  value  of  which 
amounted  to  several  hundred  millions,  to  the  great  prejudice 
of  her  agriculture  and  her  rural  population,  unless,  by  restoring 
the  duties  on  these  commodities  to  their  former  rates,  she  raised 
a  barrier  to  this  English  competition. 

It  is  now  clear  that  France  was  duped  by  Poulett  Thompson  ; 
for  the  latter  was  fully  aware,  in  1834,  of  the  progress  which  / 
linen  manufacture  had  made  in  England,  and  was  to  make  in 
succeeding  years,  by  the  aid  of  new  processes  ;  and  in  that  ne 
gotiation  he  had  relied  upon  the  French  government  being  igno 
rant  of  these  advantages,   and  their  necessary  results.     The  ^    tfct* 
authors  of  that  reduction  would  even  have  us  believe  that  the 
subject  of  discussion  then  was  a  concession  to  the  linen  manu-  ^vt-^vir 
facturers  of  Belgium.     But  how  can  they  justify  their  ignorance 
of  the  progress  of  English  manufactures,  and  their  want  of 

,  •         n 

caution  ? 

Be  this  as  it  may,  it  is  at  least  not  doubtful  that  France, 
under  penalty  of  sacrificing  the  greatest  part  of  her  linen  manu-  *  |  ^^^^ 
facture,  must  protect  it  again,  and  that  the  latest  attempt  in 
our  day  to  extend  free  trade  between  England  and  France,  has 
furnished  indubitable  testimony  of  British  ability  and  French 
inaptness  ;  it  is  like  a  new  treaty  of  Methuen,  or  like  a  second  $*+&  4** 
treaty  of  Eden.  I 

What  said  Poulett  Thompson  when  he  heard  the  complaints 
of  the  French  manufacturers,  and  found  that  the  French  go 
vernment  was  disposed  to  repair  the  fault  it  had  committed? 
He  did  precisely  what  Huskisson  had  done  before  him;  he 
threatened  the  prohibition  of  wines  and  silks  from  France. 
Such  is  the  cosmopolitism  of  England  !  France  was  to  permit  «uXWv£ 
the  extinction  of  an  industry  ten  centuries  old,  an  industry  in- 

L*' 


J 


456  PUBLIC    POLICY. 

timately  connected  with  the  welfare  of  all  the  working  classes, 
and  especially  of  those  pertaining  to  agriculture,  the  products 
of  which  were  articles  of  the  first  necessity  for  all  classes,  and 
which  may  be  valued  at  three  or  four  hundred  millions,  and  this 
to  purchase  the  privilege  of  selling  wine  and  silk  to  England, 
for  a  few  millions  more  than  before.  Independently  of  that 
disproportion  in  values,  one  needs  only  to  ask  what  would  be 
come  of  France,  in  case  the  commercial  relations  between  the 
two  countries  should  be  interrupted  by  war,  and  she  could  no 
longer  send  to  England  her  surplus  of  silks  and  wine,  and  at 
the  same  time  should  be  destitute  of  an  article  so  indispensable 
as  linen? 

On  reflection,  it  is  evident  that  the  linen  question  is  not 
merely  one  of  material  prosperity ;  but  that  it  is  above  all,  as 
in  every  case  connected  with  important  branches  of  domestic 
industry,  a  question  of  independence  and  national  power. 

It  might  be  thought  that  the  spirit  of  invention,  in  thus  im 
proving  the  manufacture  of  linen,  has  assumed  the  mission  of 
giving  nations  to  understand  the  true  nature  of  manufacturing 
industry,  its  connection  with  agriculture,  its  influence  upon 
independence  and  upon  the  power  of  the  States,  and  to  place 
distinctly  before  them  the  errors  of  theory. 

The  School,  as  every  one  knows,  maintains  that  each  nation 
possesses  in  some  branches  of  industry  special  advantages  ;  gifts 
of  nature,  or  results  of  education,  which  are  compensated  by  the 
exchanges  of  free  trade.  We  have  shown,  in  a  previous  chapter, 
that  this  maxim  is  only  true  of  agriculture,  in  which  production 
depends  chiefly  on  climate  and  fertility  of  soil ;  but  that  it  is 
not  true  in  respect  to  manufacturing  industry,  for  which  all  the 
nations  of  the  temperate  climes  have  an  equal  vocation,  provided 
they  possess  the  required  material,  intellectual,  political,  and 
social  conditions. 

England  presents,  in  our  day,  a  bright  example  in  support  of 
our  doctrine.  If,  by  experience,  by  persevering  efforts,  and  by 
agricultural  resources,  any  people  have  been  specially  set  apart 
for  the  manufacture  of  linen,  they  must  assuredly  be  the  Ger 
mans,  the  Belgians,  the  Dutch,  and  the  inhabitants  of  Northern 


INSULAR    SUPREMACY.  457 

France.  It  has  been  in  their  hands  a  thousand  years.  On  the 
contrary,  the  English  even  so  late  as  the  middle  of  the  last 
century  had  made  so  little  progress  in  it,  that  they  imported 
from  abroad  the  greater  part  of  the  linen  they  used.  Without 
the  protection  they  gave  to  their  manufactures  at  that  time,  the 
domestic  production  would  never  have  sufficed  to  supply  their 
own  consumption  and  that  of  the  British  colonies.  It  is  known 
that  Lords  Castlereagh  and  Liverpool  stated  in  Parliament  that 
without  protection  the  English  manufacturers  could  not  sustain 
the  competition  of  German  linen.  Now  in  our  day  we  see  the 
English,  who,  in  all  previous  times,  have  been  the  worst  manu 
facturers  of  linen  in  Europe,  obtaining  by  virtue  of  their  inven 
tions  the  monopoly  of  the  linen  manufacture,  just  as  within 
fifty  years  they  have  invaded  India  with  their  cotton  goods; 
they  who,  for  centuries,  had  been  unable  to  sustain  in  their  own 
markets  the  competition  of  Indian  goods. 

At  this  moment  they  are  discussing  in  France  how  it  happens 
at  this  late  day  that  England  has  performed  such  prodigies  in 
the  linen  manufacture,  although  Napoleon  had  been  the  first 
to  stimulate  that  progress,  by  offering  a  large  premium  for  the 
invention  of  a  machine  to  spin  flax,  and  the  French  engineers 
and  manufacturers  had  turned  their  attention  to  the  subject 
before  their  rivals  upon  the  other  side  of  the  Channel.  It  is 
discussed  whether  the  English  or  French  have  the  greatest 
aptitude  for  the  mechanic  arts.  Every  explanation,  in  fact,  has 
been  given  but  the  right  one.  It  is  incorrect  to  attribute  to  the 
English  greater  aptitude  for  mechanics,  or  a  greater  aptitude 
for  industry  in  general,  than  the  Germans  or  the  French. 
Before  Edward  III.,  the  English  were  the  greatest  sluggards, 
the  merest  good-for-nothing  men  of  Europe ;  it  would  not  have 
occurred  to  them  to  compare  themselves  in  genius  for  mechanics, 
and  in  industrial  aptitude  of  any  kind,  to  the  Italians,  the  Bel 
gians,  or  the  Germans.  But  since  their  government  has  trained 
them  in  the  paths  of  industry  and  finished  their  education, 
they  have,  by  degrees,  become  able  to  dispute  with  their  mas 
ters  the  question  of  the  highest  industrial  capacity.  If  within 
the  last  twenty  years  the  English  have  succeeded  better  than 


458  PUBLIC    POLICY. 

other  nations,  and  especially  than  the  French,  in  the  construc 
tion  of  machinery  for  the  manufacture  of  flax ;  it  is  because  of 
their  superiority  generally  in  mechanics ;  because  of  their  supe 
riority  in  spinning  and  weaving  cotton,  which  so  closely  resem 
bles  spinning  and  weaving  of  flax;  because  their  commercial 
policy  procured  them  a  greater  supply  of  capital  than  the 
French  ;  because  this  same  policy  had  opened  for  the  product  of 
their  flax  manufacture  a  much  more  extensive  home  and  foreign 
market ;  lastly,  because  protecting  duties,  in  such  circumstances, 
offered  to  the  mechanical  genius  of  the  country,  the  highest 
stimulus  to  prosecute  the  improvement  of  that  industry,  and 
abundant  resources  for  experiment  and  persevering  application. 
We  have  elsewhere  explained,  that  in  manufacturing  industry 
all  special  branches  are  intimately  connected ;  that  the  improve 
ment  of  one  prepares  the  way  and  encourages  the  improvement 
of  all  others ;  that  no  one  can  be  neglected  without  injury  to 
others ;  that,  in  a  word,  the  manufacturing  industry  of  a  nation 
constitutes  an  indivisible  whole.  The  recent  progress  of 
England  in  the  linen  industry  confirms  these  positions. 


CHAPTER   II. 
INSULAR  SUPREMACY  AND  THE  GERMAN  CUSTOMS-UNION. 

GERMANY  has  fully  experienced  within  the  last  twenty 
years  what  a  great  country  is  in  our  time  without  a  good  com 
mercial  policy,  and  what  a  great  country  may  now  become  with 
a  good  commercial  policy.  She  has  been,  as  Franklin  used  to 
say  of  the  State  of  New  Jersey,  a  cask  tapped  at  both  ends,  the 
contents  being  drawn  off  by  her  neighbors.  England,  not  satisfied 
with  having  ruined  the  largest  portion  of  the  manufactures  of 
Germany,  and  with  furnishing  her  with  immense  quantities  of 
woollen  and  cotton  goods,  besides  colonial  products,  has  rejected 
her  corn,  her  timber,  and  even,  at  times,  her  wool.  There  was 


GERMAN    CUSTOMS-UNION.  459 

a  time  when  England  found  in  Germany,  for  her  manufactured 
articles,  a  market  ten  times  more  extensive  than  in  her  boasted 
empire  of  the  East  Indies ;  and  yet  these  insular  monopolists 
refused  the  poor  Germans  what  they  granted  to  their  Hindoo 
subjects,  the  privilege  of  paying  for  their  purchases  of  manufac 
tured  goods  in  agricultural  products.  In  vain  did  the  Germans 
humble  themselves  to  the  condition  of  hewers  of  wood  and 
drawers  of  water  for  England :  they  were  treated  more  harshly 
than  a  conquered  people.  It  is  with  nations  as  with  indivi 
duals  ;  those  which  submit  to  be  ill-treated  by  a  single  one  will 
soon  be  despised  by  all,  and  become,  at  last,  the  sport  of  the 
weakest.  France,  which  now  exports  to  Germany  wine,  oil, 
silks,  and  fancy  articles,  to  a  considerable  amount,  has  closed 
her  markets  to  the  cattle,  the  wheat,  and  the  linen  of  Germany. 
But  worse  yet ;  a  small  maritime  province,  formerly  German, 
inhabited  by  Germans,  having  become  rich  and  powerful  by  the 
aid  of  Germany,  but  which  could  never  have  subsisted  but  with 
and  through  Germany,  has  closed  during  nearly  half  a  genera 
tion,  under  frivolous  pretexts,  the  most  beautiful  river  of 
Germany.  To  complete  the  mockery,  it  has  been  taught  by 
many  professors  of  political  economy  that  nations  can  only 
arrive  at  wealth  and  power  by  universal  free  trade. 

Such  was  the  state  of  things  in  Germany  ;  how  does  the 
matter  stand  at  this  date  ?  Germany  in  the  space  of  ten  years 
has  advanced  a  century  in  prosperity  and  industry,  in  self-re 
spect  and  power.  How  so  ?  The  suppression  of  the  barriers 
and  custom-houses  which  separated  the  German  States,  has  been 
an  excellent  measure ;  but  it  had  borne  bitter  fruits  if  home  in 
dustry  had  been  left  exposed  to  foreign  competition.  The  pro 
tection  of  the  tariff  of  the  Customs-Union  (Zoll-verein)  extended 
to  manufactured  products  in  general  use,  has  accomplished 
this  wonderful  change. 

We  confess  it  frankly,  the  tariff  of  the  Customs-Union  is  not, 
as  has  been  asserted,  a  mere  revenue  tariff;  it  has  not  stopped 
at  ten  or  fifteen  per  cent.,  as  alleged  by  Huskisson ;  we  hesitate 
not  to  say,  it  affords  a  protection  from  twenty  to  sixty  per  cent, 
on  manufactured  products  in  general  use. 


460  PUBLIC    POLICY. 

Now  what  is  the  result  of  that  protection?  Do  the  con 
sumers  pay  for  these  manufactured  articles  from  twenty  to 
sixty  per  cent,  more  than  they  formerly  paid  for  those  im 
ported  ?  Or  are  the  German  goods  inferior  ?  By  no  means. 
Dr.  Bowring  himself  admits  that  the  products  of  the  industries 
protected  by  high  duties,  are  of  a  better  quality  and  at  a  lower 
price  than  the  foreign  articles.  The  competition  at  home,  and 
protection  against  overwhelming  competition  from  abroad,  have 
worked  wonders,  of  which  the  School  is  ignorant.  It  is  not 
true  then,  as  has  been  pretended  by  the  School,  that  protection 
enhances  the  price  of  domestic  products  by  the  amount  of  the 
protective  duty.  Duties  may  cause  a  temporary  increase  of 
price,  but  in  any  country  prepared  for  manufacturing  home 
competition  soon  reduces  the  prices  below  the  rates  at  which 
they  would  have  remained  under  the  operation  of  free  trade. 

Has  agriculture  been  suffering  by  reason  of  these  high 
duties?  Not  at  all;  it  has  been  prosperous,  it  has  realized 
during  ten  years  ten-fold  profits.  The  demand  for  agricultural 
products  has  increased,  and  prices  have  advanced  over  the 
whole  country ;  it  is  notorious  that  under  the  influence  of  manu 
facturing  industry,  property  in  land  has  increased  from  fifty  to 
one-hundred  per  cent. ;  that  the  wages  of  labor  have  also  ad 
vanced  ;  that  many  routes  of  transportation  and  travel  are  pro 
jected,  or  in  course  of  construction,  throughout  the  territories 
of  the  Customs-Union. 

Such  happy  results  encourage  us  all  to  pursue  the  same 
path ;  several  States  of  the  Zoll-verein  have  brought  forward 
propositions  with  that  view,  but  they  have  not  yet  been  adopted, 
because  other  States,  it  seems,  hope  for  better  fortune  through  the 
abolition  by  England  of  her  duties  on  wheat  and  timber,  and 
because  influential  persons,  it  is  said,  continue  to  have  faith 
in  the  cosmopolite  system,  and  to  doubt  the  evidence  of  their 
own  senses.  Dr.  Bowring's  report  contains  in  this  respect,  as 
well  as  in  reference  to  the  condition  of  the  Customs-Union,  and 
the  tactics  of  the  English  government,  important  revelations.  Let 
us  examine  for  a  moment  that  document. 


GERMAN    CUSTOMS-UNION.  461 

We  begin  by  indicating  the  point  of  view  from  which  this 
paper  has  been  sketched. 

Labouchere,  President  of  the  Board  of  Trade  in  Melbourne's 
cabinet,  despatched  Dr.  Bowring  to  Germany  for  the  same  purpose 
for  which  Poulett  Thompson  had  sent  him  in  1834  to  France. 
The  point  was  to  induce  the  Germans  to  open  their  markets  to 
English  manufactured  products,  under  the  influence  of  conces 
sions  to  their  wheat  and  timber,  just  as  had  been  proposed  to 
the  French  under  the  influence  of  concessions  to  their  wines 
and  spirits ;  the  two  missions  differed  only  in  this :  that  the 
concessions  proposed  to  the  French  met  with  no  opposition  in 
England,  whilst  those  offered  to  the  Germans  were  first  to  be 
carried  in  England. 

The  two  reports  were  consequently  to  have  a  different  bear 
ing.  The  one  treating  of  the  commercial  relations  between 
France  and  England  was  addressed  exclusively  to  the  French. 
It  was  necessary  to  tell  them  that  Colbert  with  his  protective 
system  had  done  good  in  making  them  believe  that  the  treaty  of 
Eden  had  been  advantageous  to  France,  and  that  the  continental 
system  as  well  as  the  prohibitive  system  to  which  France  still 
adhered,  had  been  fatal  to  her.  In  a  word,  nothing  could  be 
done  but  to  hold  up  Adam  Smith's  theory,  and  dispute  boldly  the 
results  of  the  protective  system. 

The  second  report  was  not  of  such  easy  construction,  for  it 
was  to  be  addressed  at  once  to  English  proprietors,  and  to  the 
German  governments ;  to  the  former,  it  was  necessary  to  say : 
Here  is  a  nation,  which,  by  the  help  of  protection,  has  already 
accomplished  immense  industrial  progress,  and  which,  possessed 
of  all  necessary  resources,  has  boldly  determined  to  obtain  the 
control  of  her  home-market,  and  to  compete  with  England  in 
foreign  markets ;  this  is  your  mistaken  work,  ye  tories  of  the 
House  of  Lords  and  of  the  House  of  Commons ;  it  is  the  result 
of  your  senseless  corn  laws,  by  which  the  price  of  food,  of  raw 
materials,  and  of  labor,  have  been  so  depressed  in  Germany, 
that  German  manufacturers  are  actually  in  a  better  position  than 
the  English  manufacturers.  Hasten,  then,  ye  tories,  to  repeal 
these  laws.  You  can  now  inflict  a  triple  injury  upon  German 


462  PUBLIC    POLICY. 

industry,  there  will  ensue  in  Germany  a  rise  in  the  price  of 
food,  and  a  fall  in  England  in  the  prices  of  food,  raw  materials 
and  labor ;  secondly,  the  exportation  of  wheat  from  Germany 
to  England  will  open  the  way  for  the  export  of  English  manu 
factured  products  to  Germany;  thirdly,  the  German  Customs- 
Union  professes  to  be  ready  to  reduce  its  duties  upon  common 
woollen  and  cotton  goods,  in  the  same  proportion  as  England 
shall  reduce  her  duties  upon  the  importation  of  German  wheat 
and  timber.  England  cannot  fail  by  this  policy  again  to  ruin 
the  German  manufacturers.  But  we  must  not  delay:  every 
year,  the  manufacturers  of  the  Union  acquire  more  influence, 
and  if  you  hesitate,  the  abolition  of  the  corn  laws  will  come  too 
late.  In  a  short  time  the  beam  of  the  balance  will  denote  a 
different  state  of  things.  Ere  long  the  German  manufacturers 
will  create  such  a  great  demand  for  agricultural  products,  that 
Germany  will  have  no  wheat  to  export.  What  concessions  can 
you  then  offer,  to  reconcile  her  to  the  destruction  of  her  own 
manufactures,  to  prevent  her  from  spinning  the  cotton  she 
weaves,  and  from  encountering,  if  not  rivalling  you  in  every 
market  of  your  foreign  trade  ? 

Such  was  the  argument  advanced  by  the  author  of  the  Report  to 
the  land-holders  of  England.  The  political  rule  of  Great  Britain 
permits  no  secret  Reports  to  the  Cabinet.  Dr.  Bowring's  paper 
was  therefore  to  be  public,  and  liable,  by  means  of  translations 
and  extracts,  to  fall  into  the  hands  of  the  Germans.  It  was 
needful,  for  that  reason,  to  abstain  from  expressions  likely  to 
enlighten  the  Germans  upon  their  true  interests.  Every  argument 
addressed  to  parliament  was  to  be  tempered  by  an  antidote  for 
the  use  of  the  governments  of  Germany.  It  was  necessary  to 
maintain  that  protection  had,  in  Germany,  given  a  false  direc 
tion  to  capital,  and  had  especially  injured  the  agricultural  in 
terests  ;  that  those  interests  ought  to  be  occupied  solely  with 
the  external  market ;  that  agriculture  was  the  principal  German 
industry,  because  it  gave  occupation  to  three-fourths  of  the  in 
habitants  ;  that  it  was  of  course  a  mere  mockery  to  ask  protec 
tion  for  the  producers ;  that  even  manufacturing  industry  could 
only  prosper  under  the  effects  of  foreign  competition;  that 


GERMAN    CUSTOMS-UNION.  463 

public  opinion  in  Germany  favored  free  trade ;  that  knowledge 
was  too  widely  spread  in  that  country  for  any  claims  in  favor 
of  high  duties  to  succeed ;  that  the  most  enlightened  men  of  the 
country  were  partisans  of  a  reduction  of  duties  on  common 
woollen  and  cotton  goods,  whenever  the  English  duties  on  wheat 
and  timber  should  be  diminished. 

This  Report,  in  a  word,  utters  two  opposite  and  contradictory 
opinions.  Which  is  the  true  one?  That  addressed  to  the 
English  parliament,  or  that  intended  for  the  ear  of  the  govern 
ments  of  Germany  ?  It  is  difficult  to  answer  the  considerations 
presented  by  Dr.  Bowring  to  influence  the  parliament  in  dimi 
nishing  the  duties  on  German  wheat  and  timber,  resting  as  they 
do  upon  statistical  data,  precise  calculations  and  evidences ;  those 
tending  to  divert  the  German  governments  from  the  protective 
system  are  mere  naked  assertions. 

Let  us  notice  the  arguments  by  which  Dr.  Bowring  proves 
to  the  parliament  that  if  the  progress  of  the  protective  system 
in  Germany  shall  not  be  arrested  in  the  mode  he  proposes,  the 
German  market  will  be  irrevocably  lost  for  English  manufac 
tures. 

The  German  people,  he  says,  are  distinguished  by  moderation, 
economy,  application,  and  intelligence.  The  German  is  gene 
rally  educated.  Excellent  special  schools  have  diffused  technical 
knowledge  throughout  the  country.  The  arts  ef  design  are  there 
much  more  highly  cultivated  than  in  England.  The  considerable 
increase  which  the  population  of  Germany  presents  every  year, 
as  well  as  the  number  of  the  cattle,  and  especially  of  the  sheep, 
shows  the  progress  of  agriculture.  Dr.  Bowring  here  omits  the 
important  fact  of  the  increase  in  the  price  of  lands  and  agricul 
tural  productions.  In  the  manufacturing  districts,  wages 
have  increased  thirty  per  cent. ;  the  country  abounds  in  unem 
ployed  water-power,  the  least  expensive  of  all  motive  powers. 
Mining  has  there  reached  an  activity  hitherto  unknown.  From 
1832  to  1837,  Germany  has  accomplished  signal  progress  in 
all  protected  branches  of  industry,  and  especially  in  woollen 
and  cotton  goods  for  general  use,  the  importation  of  which  from 
England  has  wholly  ceased.  Nevertheless,  Dr.  Bowring  admits, 


464  PUBLIC    POLICY. 

in  accordance  with  the  evidence  submitted  by  him  as  worthy  of 
trust,  that  the  price  of  Prussian  goods  is  sensibly  lower  than  the 
corresponding  English  goods  ;  that  some  colors  are  certainly  not 
equal  to  those  of  the  best  English  dyers ;  but  that  others  are 
unexceptionable,  and  as  perfect  as  possible ;  that  as  to  spinning, 
weaving,  and  other  processes  of  elaboration,  Germany  is  fully 
on  a  par  with  Great  Britain ;  that  she  only  discloses  some  infe 
riority  in  dressing ;  but  that  the  imperfections  in  her  industry 
will  disappear  in  the  course  of  time. 

It  is  easy  to  perceive  that  such  an  exposition  may  finally  lead 
the  English  parliament  to  repeal  legislation  which  has  hitherto 
operated  as  a  protection  to  Germany ;  but  what  seems  to  us 
altogether  incomprehensible  is,  that  England  could  hope  by 
these  Reports  to  induce  Germany  to  abandon  a  system  to  which 
she  is  indebted  for  such  immense  progress. 

Dr.  Bowring  assures  us,  that  German  industry  is  protected  at 
the  cost  of  her  agriculture  :  but  how  can  we  credit  this  assertion, 
when  we  see  the  demand  for  her  agricultural  products,  the  price 
of  those  products,  the  rate  of  wages,  rents,  and  the  value  of 
lands,  increasing  greatly  throughout  the  country,  and  on  the 
other  hand,  agriculturists  paying  for  manufactured*  articles  no 
higher  prices  than  before. 

Dr.  Bowring  thinks  that  in  Germany  there  are  three  agricul 
turists  for  one  manufacturer ;  but  this  only  shows  that  the 
number  of  manufacturers  is  not  in  due  proportion  with  the  agri 
culturists,  and  we  cannot  see  how  the  proportion  can  be  re-estab 
lished,  unless  by  extending  protection  to  those  industries  which 
are  yet  carried  on  in  England  to  supply  the  German  market,  but 
by  workmen  who  consume  the  farm  products  and  other  goods  of 
England  instead  of  those  of  Germany. 

Dr.  Bowring  pretends  that  agriculture  can  only  look  abroad 
for  an  increase  of  its  market ;  but  the  example  of  England  is 
not  alone  in  showing  that  a  full  demand  for  agricultural  products 
can  only  be  secured  by  a  flourishing  home  manufacture,  and 
this  Dr.  Bowring  implicitly  acknowledges  by  expressing  in  his 
Report  the  fear  that  if  England  should  delay  for  a  few  years 


GERMAN    CUSTOMS-UNION.  465 

the  repeal  of  her  corn  laws,  Germany  may  no  longer  have  wheat 
or  timber  to  spare  for  exportation. 

Dr.  Bowring  states  the  truth  when  he  asserts  that  the  agricul 
tural  interests  have  obtained  the  supremacy  in  Germany ;  but 
this  interest,  by  the  very  fact  that  it  preponderates,  must,  as  has 
been  shown  in  the  foregoing  chapter,  by  promoting  the  growth 
of  manufactures,  endeavor  to  establish  a  real  equilibrium ;  for 
the  prosperity  of  agriculture  depends  upon  its  equilibrium  with 
the  manufacturing  interest,  and  not  upon  its  own  supremacy. 

But  the  author  of  this  Report  is  completely  astray,  in  our 
opinion,  in  affirming  that  the  interest  of  the  German  manufac 
turers  invites  competition  from  abroad  in  the  German  market, 
for  the  very  reason,  that  as  soon  as  they  shall  be  able  to  supply 
their  own  country,  they  must  encounter  that  same  competition 
in  foreign  markets  when  they  come  to  export  the  surplus  of  their 
production,  a  competition  which  they  can  only  sustain  by  cheap 
ness  ;  now  cheapness «is  contrary  to  the  essence  of  the  protective 
system ;  the  only  object  of  which  is  to  secure  high  prices  for  the 
manufacturer.  This  reasoning  contains  as  many  errors  and 
falsehoods  as  can  be  expressed  in  so  many  words.  Dr.  Bowring 
will  not  deny  that  a  manufacturer  can  sell  his  articles  at  a  price 
lower  in  proportion  as  he  produces  more,  and  that  of  course  an 
industry  already  in  possession  of  a  market  is  the  more  able  to 
sell  at  low  rates  a  portion  of  its  products  in  a  foreign  market. 
He  will  find  the  evidence  of  this  in  the  very  tables  he  has  pub 
lished  on  the  progress  of  German  industry ;  in  fact,  in  propor 
tion  as  home  industry  took  possession  of  the  home  market,  it 
also  increases  its  exports.  The  recent  experience  of  Germany, 
as  well  as  the  old  experience  of  England,  shows  that  the  protec 
tive  system  has  by  no  means  the  necessary  consequences  of  high 
price  for  manufactured  articles.  German  industry,  in  fact,  is 
far  from  able  to  supply  the  home  market.  To  do  this,  it  must 
manufacture  the  13,000  quintals  of  cotton  goods,  the  18,000 
quintals  of  woollen  goods,  and  500,000  quintals  of  cotton  and 
flax  thread,  which  are  actually  imported  from  England.  This 
result  being  attained,  Germany  will  have  to  import  besides  half 
a  million  of  quintals  of  raw  cotton,  and  to  this  effect  increase 
30 


466  PUBLIC    POLICY. 

in  similar  proportion  her  direct  relations  with  tropical  countries, 
by  paying  for  a  great  part,  if  not  the  whole  amount  of  this 
cotton,  with  the  products  of  her  manufactures. 

The  opinion  pronounced  in  the  Report,  that  the  public  senti 
ment  of  Germany  is  for  free  trade,  requires  correction  in  this, 
that  since  the  establishment  of  the  Customs-Union,  they  have,  in 
Germany,  a  clearer  idea  of  what  is  understood  in  England  by 
free  trade ;  for,  since  that  time,  as  Dr.  Bowring  himself  tells 
us,  "  the  ideas  of  the  German  people  have  left  the  sphere  of 
hope  and  fancy  for  that  of  positive  and  material  interests." 

He  says  rightly  enough  that  knowledge  is  widely  diffused  in 
Germany ;  it  is  for  this  reason  that  they  have  ceased  there  from 
pursuing  cosmopolite  dreams ;  that  they  think  for  themselves ; 
that  they  defer  to  their  own  judgment,  to  their  own  personal 
experience,  to  their  own  good  sense,  more  than  to  systems  which 
experience  denies  and  condemns ;  it  is  for  this  reason  that  they 
begin  to  understand  why  Burke,  when  opening  his  heart  to 
Adam  Smith,  declared  that  a  nation  must  be  governed,  not  ac 
cording  to  cosmopolite  systems,  but  according  to  a  profound 
knowledge  of  its  interests ;  for  this  reason,  that  they  suspect  in 
Germany  those  advisers  who  blow  hot  and  cold  with  the  same 
breath  ;  that  they  appreciate  at  their  true  value  the  advances 
of  industrial  rivals  and  their  propositions ;  lastly,  that  they  re 
member,  whenever  a  proposal  comes  from  England,  the  famous 
line  of  the  poet  upon  the  subject  of  Greek  presents. 

There  are,  therefore,  reasons  for  doubting  whether  statesmen 
of  influence  in  Germany  have  seriously  promoted  the  hopes  of 
the  author  of  the  Report,  that  that  country  would  renounce  her 
protective  system  for  the  low  price  of  permission  to  send  to 
England  some  shipments  of  wheat  and  timber;  at  any  rate, 
public  opinion  would  hesitate  to  place  such  statesmen  in  the 
class  of  reflecting  men.  To  deserve  that  title  in  Germany,  it 
suffices  not  to  have  been  trained  in  the  common-places  and 
beaten  paths  of  the  cosmopolite  School ;  they  require  a  states 
man  to  know  the  strength  and  the  wants  of  his  country,  and 
without  being  preoccupied  with  systems,  to  apply  himself  to 
develop  the  former  and  to  provide  for  the  latter.  He  would 


GERMAN    CUSTOMS-UNION.  467 

betray  a  great  ignorance  of  that  strength  and  those  wants,  who 
should  be  ignorant  what  immense  efforts  have  been  necessary 
to  carry  the  industry  of  a  country  to  the  stage  at  which  Ger 
man  industry  has  now  arrived,  who  should  not  be  able  to  foresee 
the  brilliant  future  of  the  latter,  who  could  betray  the  confidence 
which  the  German  manufacturers  have  put  in  the  wisdom  of 
their  governments,  and  thus  destroy  the  spirit  of  national  en 
terprise  ;  who  should  not  know  how  to  distinguish  the  elevated 
rank  occupied  by  a  manufacturing  nation  of  the  first  order,  from 
the  humble  condition  of  an  exporter  of  wheat  and  timber ;  who 
should  not  understand  how  precarious,  even  in  ordinary  times, 
a  foreign  market  is  for  those  articles ;  with  what  facility  con 
cessions,  of  which  they  might  have  been  the  object,  may  be 
withdrawn,  and  what  fatalities  are  involved  in  an  interruption 
of  that  trade  caused  by  war  or  revolutions ;  lastly,  who  has  not 
learned  by  the  example  of  other  large  States,  how  far  the 
existence,  the  independence,  and  the  power  of  a  nation,  depend 
upon  the  possession  of  a  manufacturing  industry,  developed  in 
all  its  branches  ? 

Indeed  very  little  notice  can  have  been  taken  of  the  feeling 
of  nationality  and  unity  which  has  risen  in  Germany  since  1830, 
to  believe  with  the  author  of  the  return,  that  the  policy  of  the 
Zoll-verein  will  be  controlled  by  the  interests  of  Prussia ;  because 
two-thirds  of  the  population  are  Prussians  ;  because  the  interests 
of  Prussia  require  the  export  of  timber  and  grain  to  England ; 
because  her  manufacturing  capital  is  insignificant,  and  Prussia 
will,  of  course,  oppose  every  impediment  to  the  import  of  foreign 
manufactured  products ;  and  because  all  the  heads  of  the  minis 
terial  departments  are  determined  upon  this  policy. 

We  read,  however,  in  the  beginning  of  the  Report,  as  follows  : 
"  The  German  Customs-Union  is  the  realization  of  the  idea  of 
nationality  so  widely  diffused  in  that  country.  If  that  associa 
tion  be  well  directed,  it  will  effect  the  fusion  of  all  the  German 
interests  into  a  single  one.  It  is  the  first  step  to  German  com 
mercial  unity;  it  has  opened  the  way  to  political  unity;  it  has 
substituted  a  large  and  powerful  national  element  in  place  of 
narrow  ideas,  prejudices,  and  superannuated  habits." 


468  PUBLIC    POLICY. 

Now  how  shall  we  reconcile  these  wise  and  just  observations  with 
the  opinion  that  Prussia  would  sacrifice  her  independence  and 
the  future  grandeur  of  the  country  to  paltry  considerations  of 
private  interest,  of  an  interest  ill-understood,  and  at  best,  merely 
temporary;  that  she  would  not  understand  that  Germany  rises  or 
falls  in  proportion  as  she  is  faithful  to  her  commercial  policy,  as 
Prussia  herself  rises  or  falls  with  Germany  ?  How  are  we  to 
reconcile  the  assertion  that  the  chiefs  of  department  in  Prussia 
would  be  opposed  to  the  protective  system,  with  the  fact  that 
the  duties  on  woollen  and  cotton  goods  have  emanated  from 
Prussia  ?  These  contradictions  and  the  brilliant  picture  which 
the  author  has  drawn  of  Saxon  industry  and  progress,  cannot 
but  awaken  the  suspicion  that  his  intention  was  to  excite  the 
jealousy  of  Prussia. 

Be  this  as  it  may,  it  is  strange  that  Dr.  Bowring  has  attached 
so  much  importance  to  the  particular  opinions  of  the  heads  of  the 
departments ;  he,  an  English  publicist,  who  knew  the  power  of 
public  opinion,  and  who  must  have  known  that,  in  our  time,  the 
personal  ideas  of  the  heads  of  department,  even  in  non-constitu 
tional  States,  have  but  little  weight  when  they  are  at  strife  with 
public  opinion,  with  the  material  interests  of  a  country,  or 
when  their  tendency  appeared  to  be  retrograde  and  anti-national. 
But  he  seemed  to  understand  this  well,  when  he  confessed 
that  in  reference  to  the  repeal  of  the  corn  laws,  the  Prussian,  as 
well  as  the  English  government,  had  ascertained  by  experience 
that  the  opinion  of  public  officers  does  not  prevail  in  all  places 
nor  at  all  times  ;  that  there  was,  therefore,  ground  for  considering 
whether  the  corn  and  the  timber  of  Germany  should  be  admitted 
into  England  even  without  previous  concessions  of  the  Customs- 
Union,  so  as  to  open  the  way  in  the  German  markets  for  the 
sale  of  English  manufactures.  This  view  is  perfectly  cor 
rect.  Dr.  Bowring  understands  that  the  corn  laws  of  Eng 
land  have  enlarged  German  industry ;  that,  without  them,  that 
industry  would  have  been  far  less  efficient;  that  their  repeal 
might  not  only  arrest  further  progress,  but  cause  it  to  recoil,  at 
least  if  we  suppose  the  commercial  legislation  of  Germany  to 
remain  the  same  as  at  present.  It  is  to  be  regretted  that  the 


GERMAN    CUSTOMS-UNION.  469 

English  had  not,  twenty  years  ago,  acknowledged  the  justness 
of  this  reasoning.  In  our  days  the  English  legislation  not  having 
separated  German  agriculture  from  the  British  manufactures, 
Germany,  with  a  progress  of  twenty  years  in  an  industrial 
career  achieved  at  immense  sacrifices,  would  he  blind  to  allow 
herself  to  be  diverted  by  the  repeal  of  the  English  laws  from  the 
great  national  object  she  is  now  pursuing.  We  have,  indeed,  a 
firm  conviction  that  Germany,  in  that  case,  ought  to  increase 
her  duties  as  compensation  for  the  advantage  which  the  repeal 
of  the  corn  laws  would  give  to  the  English  over  the  German 
manufacturers.  For  a  long  time  to  come,  Germany  can 
adopt  no  other  policy  toward  England  than  that  of  a  manu 
facturing  nation  yet  far  behind,  but  exerting  all  her  energy  to 
overtake,  if  not  surpass  her  rival.  Any  other  policy  would 
endanger  German  nationality.  If  the  English  need  corn  or 
timber  from  abroad,  whether  they  import  from  Germany  or  any 
other  country,  Germany  must  not  strive  less  to  preserve  the 
advantages  which  her  industry  has  already  obtained,  and  to 
secure  a  greater  progress  in  time  to  come.  If  the  English  are 
unwilling  to  receive  the  wheat  and  the  timber  of  Germany,  so 
much  the  better ;  her  industry,  her  shipping,  her  foreign  trade 
will  increase  the  faster,  her  system  of  internal  communication 
will  be  improved  the  sooner,  and  the  German  nationality  will 
acquire  the  more  certainly  its  natural  basis.  It  may  be  that 
corn  and  timber  in  the  Baltic  provinces  of  Prussia  will  not 
advance  in  price  as  promptly  in  this  case  as  if  the  British 
markets  were  immediately  opened;  but  the  improvement  of 
the  means  of  communication  at  home,  and  the  demand  for  agri 
cultural  products,  created  by  home  manufactures,  will  proceed 
with  a  degree  of  rapidity  far  from  unsatisfactory,  in  a  market 
established  in  the  very  centre  of  Germany,  a  market  not  only 
established,  but  made  permanent  forever — no  longer  oscillating,  as 
heretofore,  from  one  decennial  period  to  another,  between  famine 
and  abundance.  With  respect  to  power,  Prussia,  in  pursuing 
that  policy,  will  gain  a  real  influence  in  the  interior  of  Germany, 
of  an  hundred  times  greater  value  than  the  sacrifices  made  in 


470  PUBLIC    POLICY. 

-   ^  r 

her  Baltic  provinces;   but  she  will  merely  have  made  a  loan 
to  the  future  at  a  heavy  interest. 

It  is  obvious  that  by  means  of  this  report  the  English  minis 
try  meant  to  obtain  admission  into  Germany  for  the  common 
articles  of  wool  and  cotton,  either  by  the  suppression  or  the 
modification  of  our  specific  duties,  or  a  diminution  of  the 
rates,  or  by  the  admission  into  the  English  market  of  German 
corn  and  timber  ;  this  would  be  making  the  first  breach  in  the 
protective  system  of  Germany.  The  articles  of  general  con 
sumption  are,  as  we  have  shown,  by  far  the  most  important :  they 
constitute  the  basis  of  the  national  industry.  With  a  duty  of 
ten  per  cent,  ad  valorem,  as  demanded  by  England,  and  the 
undervaluations  which .  always  attend  the  ad  valorem  system, 
German  industry  would  be  almost  wholly  sacrificed  to  English 
competition,  especially  in  times  of  commercial  crisis,  when  the 
English  manufacturers  are  obliged  to  dispose  of  their  goods  at, 
almost  any  price.  There  is  no  exaggeration  in  averring  that  the 
propositions  of  England  tend  to  nothing  less  than  the  overthrow 
of  the  whole  system  of  German  protection,  with  a  view  to  reduce 
Germany  to  the  condition  of  an  agricultural  colony  of  England. 
It  is  for  this  purpose  that  Prussia  is  reminded  of  the  benefit 
her  agriculture  will  derive  from  a  reduction  of  the  English  duties 
on  corn  and  timber,  and  of  the  small  importance  of  her  manufac 
turing  interests. 

It  is  with  this  object  too  that  hopes  have  been  held  out  of  a 
reduction  of  duties  on  her  spirits,  and,  not  neglecting  entirely  the 
other  States,  of  reducing  five  per  cent,  the  duties  on  the  toys  of 
Nuremberg,  on  eau  de  Cologne  and  other  trifles.  This  gratifies 
small  States,  and  costs  very  little. 

The  intention  of  this  report  was  to  persuade  the  German 
governments  that  it  is  their  interest  to  employ  England  to  spin 
their  cotton  and  flax.  No  doubt  but  that  the  policy  of  the  Union, 
which  has  consisted,  first  in  favoring  the  printing,  and  then  the 
weaving,  and  in  importing  threads  of  middling  and  superior  quali 
ties,  has  been  hitherto  a  good  one ;  but  it  does  not  follow  that  it 
must  be  for  ever  good.  Industrial  legislation  must  keep  pace  with 
national  industry,  if  it  fulfil  its  proper  mission.  The  immense 


GERMAN    CUSTOMS-UNION.  471 

advantage  which  the  spinning  of  cotton,  besides  its  intrinsic  im 
portance,  carries  with  it,  has  been  already  much  discussed ;  it  cre 
ates  direct  relations  with  tropical  countries,  and  exerts  in  that 
way  considerable  influence  upon  the  merchant  marine,  and  upon 
our  exportation  of  manufactured  articles,  and,  more  than  any 
other  industry,  it  promotes  the  manufacture  of  machinery. 
Since  it  is  evident  that  neither  the  want  of  water,  nor  of  good 
workmen,  nor  of  money  capital,  nor  of  intelligence,  prevent 
Germany  from  securing  that  great  and  productive  industry,  we 
do  not  see  why  we  should  not  raise  gradually  the  protective 
duties  upon  the  various  sizes  of  cotton  thread,  so  that  we  may  be 
come  able  in  the  course  of  five  or  ten  years  to  spin  for  ourselves 
and  supply  our  own  looms.  However  high  we  may  value  the 
advantages  of  exporting  timber  and  corn,  they  are  far  from 
equal  to  those  which  spinning  would  procure  us.  We  do  not  hesi 
tate  to  declare  that  an  estimate  of  the  consumption  of  the  pro 
ducts  of  the  soil  and  of  the  forest  which  cotton-spinning  must 
occasion,  would  clearly  evince  that  that  branch  of  industry  must 
yield  the  landed  proprietors  of  Germany  a  much  higher  profit 
than  any  which  the  market  abroad  can  offer. 

Dr.  Bo  wring  doubts  whether  Hanover,  Brunswick,  the  two 
Mecklenburgs,  Oldenburg  and  the  Hanseatic  cities,  will  join  the 
Customs-Union,  unless  the  latter  shall  consent  to  a  radical  dimi 
nution  of  its  import  duties.  At  present  we  would  not  think  of  a 
remedy  which  is  an  hundred  times  worse  than  the  disease.  Our 
faith  in  the  future  of  Germany  is  moreover  not  quite  so  small 
as  that  of  the  author  of  the  Report.  As  the  revolution  of  July, 
1830,  has  been  useful  to  the  German  association,  the  first  grand 
commotion  will  remove  all  the  little  scruples  which  have 
hitherto  prevented  those  small  States  from  giving  way  to  the 
superior  exigencies  of  the  German  nationality.  How  far  com 
mercial  unity  is  important  to  nationality,  and  how  far  abstrac 
tion,  being  made  of  material  interests,  may  be  useful  to  the 
German  governments,  may  be  seen  by  the  late  memorable 
experience  of  France  upon  the  Rhenish  frontier. 

The  governments  and  the  people  of  Germany  begin  now  to 
understand  that  national  unity  is  the  rock  upon  which  rests  the 


472  PUBLIC    POLICY. 

edifice  of  their  prosperity,  of  their  national  importance,  their 
power,  their  security  for  the  present,  and  their  grandeur  for  the 
future.  The  refusal  of  the  small  States  of  the  coast  to  join  the 
Union,  will  soon  appear,  not  only  to  the  associated,  but  to  the 
separate  States  themselves,  as  a  standing  national  disgrace,  which 
should  be  wiped  off  at  any  cost.  Besides,  if  we  examine  closely, 
the  material  advantages  of  accession  far  outweigh  the  sacrifices 
they  are  called  to  make.  The  more  the  manufacturing  industry, 
the  routes  of  communication  and  foreign  trade  of  Germany  shall 
be  developed,  as  they  should  be  in  a  country  abundant  in  re 
sources,  under  the  influence  of  a  skilful  commercial  policy, 
the  more  the  desire  of  taking  a  direct  part  in  those  advantages 
shall  be  awakened  in  those  States,  the  more  inclined  will 
they  be  to  renounce  the  vicious  habit  of  looking  abroad  for 
prosperity. 

As  for  the  Hanseatic  cities  in  particular,  the  spirit  of  inde 
pendence  which  animates  the  sovereign  district  of  Hamburg 
by  no  means  destroys  our  hopes.  In  those  cities,  according  to 
Dr.  Bowring's  own  testimony,  very  many  persons  comprehend 
that  Hamburg,  Bremen  and  Lubeck  should  be  to  Germany 
what  London  and  Liverpool  are  to  England ;  what  New  York, 
Boston,  Philadelphia,  are  to  the  United  States;  they  acknow 
ledge  that  the  confederation  offers  to  their  commerce  advantages 
far  exceeding  the  inconveniences  of  submission  to  the  joint 
regulations ;  and  that  a  prosperity  without  a  guarantee  of  dura 
tion  is  in  the  last  analysis  but  a  mere  phantom. 

Men  of  sense  in  those  cities  can  rejoice  unreservedly  at  the 
constant  increase  of  their  tonnage,  at  the  progressive  extension 
of  their  commerce,  when  they  recollect  that  two  frigates  from 
Heligoland,  appearing  at  the  mouth  of  the  Weser  and  the  Elbe, 
could  destroy  in  twenty-four  hours  the  work  of  a  quarter  of  a  cen 
tury.  The  Union  will  guarantee  for  ever  to  those  places  their 
prosperity,  and  their  progress,  on  the  one  hand  with  a  fleet  of 
her  own,  and  on  the  other  by  the  aid  of  alliances.  The  Union 
will  protect  their  fisheries,  favor  their  navigation,  and  by  com 
mercial  treaties,  effected  under  a  good  consular  organization,  it 
will  consolidate  and  develop  their  commercial  relations  in  all 


GERMAN    CUSTOMS-UNION.  473 

parts  of  the  world,  and  in  all  ports.  Aided  by  their  enterprise 
it  will  found  colonies,  and  its  colonial  commerce  will  be  in  their 
hands. 

A  confederation  of  thirty-five  millions  of  inhabitants  (that 
will  be  the  number  when  it  is  complete),  with  a  mean  yearly  in 
crease  in  population  of  one  and  a  half  per  cent.,  can  easily  send 
abroad  yearly,  two  or  three  hundred  thousand  individuals ;  a 
country,  the  provinces  of  which  swarm  with  educated  and  intelli 
gent  men,  disposed  to  seek  their  fortune  in  distant  countries, 
easily  taking  root  in  any  place,  gladly  establishing  themselves 
wherever  virgin  land  is  to  be  found  ;  —  such  a  confederation  must 
soon  take  the  first  rank  among  the  nations  which  found  colonies 
and  propagate  civilization. 

The  necessity  of  this  achievement  of  the  Zoll-verein  is  so 
generally  felt  in  Germany,  that  the  author  of  the  Report  could 
not  help  noticing  it.  "  A  sea-coast  more  extended,  a  greater 
number  of  harbors,  an  increase  of  shipping,  a  federal  flag,  a 
merchant  marine,  and  a  navy,  such  are  the  objects  ardently 
longed  for  by  the  Germans,  partisans  of  the  Zoll-verein ;  but  they 
would  have  little  chance  of  prevailing  against  the  growing 
squadrons  of  Russia  and  the  merchant  marine  of  Holland  and 
the  Hanseatic  cities." 

Against  them,  it  is  true,  the  Union  could  not  accomplish 
much.  But  it  could  not  but  be  stronger  with  them  and  through 
them.  It  is  in  the  nature  of  every  power  to  divide  in  order  to 
conquer  or  to  govern.  Having  explained  how  unwise  it  would  be 
in  the  States  of  the  East  to  join  the  Zoll-verein,  Dr.  Bowring 
separates  for  ever  the  great  German  ports  from  the  rest  of 
Germany,  by  showing  how  the  warehouses  of  Altona  might  injure 
those  of  Hamburg;  as  if  a  great  commercial  State  could  not 
find  the  means  of  deriving  advantages  from  the  warehouses  of 
Altona.  We  shall  not  follow  the  author  in  his  subtle  reason 
ings,  but  limit  ourselves  to  observing  that,  applied  to  England, 
they  would  prove  that  London  and  Liverpool  would  gain  im 
mensely  by  a  separation  from  the  rest  of  the  country.  The 
idea  of  that  argument  springs  from  the  Report  of  the  English 
Consul  at  Rotterdam.  "  In  the  interest  of  British  commerce," 


474  PUBLIC    POLICY. 

says  Alexander  Ferrier,  at  the  end  of  his  Report,  "it  is  very 
important  not  to  neglect  any  means  of  preventing  the  accession 
to  the  Zoll-verein  of  the  recusant  States,  as  well  as  of 
Belgium,  and  this  for  reasons  which  are  too  obvious  to  need 
explanation."  If  Alexander  Ferrier  and  Dr.  Bowring  hold 
such  language,  if  the  English  cabinet  act  upon  their  advice, 
how  can  that  be  subject  for  reproach  ?  It  is  English  instinct 
that  speaks  and  acts.  But  to  look  for  advantages  to  Germany 
from  propositions  emanating  from  such  a  source,  is  truly  to 
exceed  the  measure  of  our  national  facility. 

"  Happen  what  may,"  adds  Ferrier,  "  Holland  must  always 
be  considered  as  the  principal  medium  of  communication 
between  Southern  Germany  and  other  countries."  It  is  obvious 
that,  by  other  countries,  Alexander  Ferrier  means  only  England, 
and  that  his  meaning  is,  If  the  English  manufacturing  supre 
macy  loses  German  props  on  the  North  Sea  and  the  Baltic,  at 
least  one  support  will  be  left,  Holland,  to  supply  Southern  Ger 
many  with  manufactured  articles  and  colonial  goods.  From  our 
natural  point  of  view,  we  say  and  affirm  that  Holland  is,  by  her 
geographical  position,  by  her  commercial  and  industrial  rela 
tions,  by  the  origin  of  her  inhabitants  and  their  language,  a 
German  province,  separated  from  us  by  intestinal  commotions, 
and  which  needs  now  to  be  reincorporated,  otherwise  Germany 
would  be  like  a  house,  the  door  of  which  belonged  to  a  non-resi 
dent  foreigner.  Holland  belongs  to  Germany  as  much  as  Brit 
tany  and  Normandy  to  France ;  and  so  long  as  Holland  remains 
a  distinct  State,  the  independence  and  the  power  of  Germany 
will  suffer,  as  France  would,  if  Brittany  and  Normandy  had 
remained  in  the  hands  of  the  English.  If  Holland  has  lost  her 
commercial  power,  it  is  owing  to  her  territorial  insignificance. 
Not  even  the  prosperity  of  her  colonies  can  prevent  Holland's 
continual  decline,  until  she  can  no  longer  bear  the  immense 
expenses  of  a  military  and  naval  establishment.  Her  efforts  to 
preserve  her  nationality  will  serve  only  to  plunge  her  deeper  into 
debt.  She  remains  under  the  control  of  England,  the  supre 
macy  of  which  she  helps  to  consolidate  by  her  apparent  inde 
pendence.  This  was  the  secret  motive  of  England  in  the  Con- 


GEKMAN    CUSTOMS-UNION.  475 

gress  of  Vienna,  in  the  restoration  of  the  would-be  Dutch 
independence.  It  is  with  Holland  as  with  the  Hanseatic  cities. 
She  is  but  the  humble  servant  of  the  English  fleet ;  incorporated 
into  Germany,  she  would  have  the  command  of  the  German 
navy.  In  her  present  state,  Holland  is  far  from  being  able  to 
manage  to  good  advantage  her  colonial  possessions,  as  she  could 
do,  were  she  a  part  of  the  German  Confederation,  for  the  very 
reason  that  she  wants  the  necessary  elements  of  colonization ; 
that  is,  men  and  intellectual  power.  Moreover,  the  manage 
ment  of  her  colonies,  as  hitherto  conducted,  depends  mainly  on  the 
good  nature  of  Germany,  or  rather  on  German  ignorance  of 
commercial  interests,  which  still  continues ;  for,  whilst  some 
nations  are  supplied  with  tropical  commodities  by  their  own 
colonies,  and  others  by  nations  subject  to  them,  the  Dutch  have 
only  Germany  as  a  market  for  the  surplus  of  their  commodities. 
But  as  soon  as  the  Germans  shall  fully  understand  that  those 
who  furnish  them  with  colonial  goods  must  consent  to  receive 
in  return  their  manufactured  articles,  they  will  find  that 
they  have  the  power  of  obliging  the  Dutch  to  come  into  the 
Zoll-verein.  Such  a  union  would  be  eminently  advantageous  to 
both  countries.  Germany  would  furnish  Holland  with  the  means, 
not  only  of  advancing  her  own  colonies,  but  of  founding  and 
acquiring  new  establishments.  Germany  would  favor  the  Dutch 
and  Hanseatic  shipping,  and  would  grant  to  the  products  of  the 
colonies  of  the  Netherlands  special  privileges.  On  the  other 
hand,  Holland  and  the  Hanseatic  cities  would  export  in  prefer 
ence  the  products  of  German  manufactures,  and  expend  their 
surplus  capital  in  the  manufactures  and  agriculture  of  Gei  jaany . 
"  Holland  has  declined  as  a  commercial  power,  because,  being  a 
mere  fraction  of  nationality,  she  attempts  to  exist  as  a  whole ; 
because  she  has  sought  her  advantage  in  oppressing  and 
weakening  the  productive  power  of  Germany,  instead  of  found 
ing  her  glory  on  the  prosperity  of  the  country  lying  behind 
her,  a  country  of  which  she  is  naturally  a  part ;  because  she 
desired  to  rise  by  isolating  herself  from  Germany,  instead 
of  being  associated  with  her ;  Holland  can  never  regain  her  an 
cient  splendor  but  in  association  with  Germany,  and  by  uniting 


476  CONTINENTAL    POLICY. 

with  her  in  the  closest  bonds.  This  union  can  alone  found  an 
agricultural,  manufacturing,  and  mercantile  nation  of  the  first 
rank." 

Dr.  Bowring  unites  in  his  table  the  imports  and  the  exports 
of  the  Zoll-verein,  with  those  of  the  Hanseatic  cities,  Holland 
and  Belgium ;  and  this  exhibits  in  a  strong  light  how  greatly 
those  countries  are  still  dependent  on  the  manufactures  of  Great 
Britain,  and  to  what  enormous  extent  their  productive  power 
would  be  increased  by  association.  He  values  the  sum-total 
of  the  goods  which  those  countries  receive  from  England  at 
,£19,842,121,  official  value,  and  to  £8,550,347,  declared  value; 
and  their  shipments  to  England  at  only  .£4,804,491,  including, 
as  is  well  known,  considerable  quantities  of  Java  coffee,  cheese, 
and  butter,  which  England  imports  from  Holland.  These  figures 
speak  whole  volumes.  We  thank  Dr.  Bowring  for  this  assem 
blage  of  facts ;  may  he  soon  have  occasion  to  announce  another 
commercial,  political,  or  rather  industrial  union. 


CHAPTER  III. 
CONTINENTAL  POLICY. 

THE  highest  object  of  rational  politics  is,  as  we  explained  in 
our  second  Book,  the  association  of  nations  under  the  reign  of 
law.  This  object  can  only  be  attained  by  the  elevation  of  the 
most  important  nations  to  a  degree  as  equal  as  possible  in  cul 
ture,  prosperity,  industry  and  power,  by  the  change  of  antipa 
thies  and  quarrels  which  divide  them,  into  sympathy  and  good 
understanding. 

In  our  days,  nations  are  estranged  from  each  other  by  various 
causes.  In  the  first  rank  are  questions  of  territory  and  boundary. 
The  political  division  of  Europe  does  not  yet  correspond  with 
the  nature  of  things.  Even  in  theory  there  is  no  agreement  as  to 
the  basis  of  territorial  distribution.  Some,  without  regard  to 
language,  origin,  or  course  of  commerce,  desire  a  territory  large, 


CONTINENTAL    POLICY.  477 

compact,  and  well  adjusted  in  reference  to  the  capital,  this  being 
central,  and,  if  possible,  well  sheltered  from  foreign  aggression  ; 
with  rivers  for  external  boundaries.  Others  maintain,  with 
greater  appearance  of  reason,  that  sea-coast,  mountains,  lan 
guage  and  origin,  are  better  barriers  than  rivers.  There  are 
nations,  however,  holding  neither  the  mouths  of  their  rivers  nor 
the  sea-shore,  so  indispensable  to  the  development  of  their 
external  relations  and  their  naval  power. 

Were  every  nation  in  possession  of  the  territory  needful  for 
its  development  and  the  maintenance  of  its  political,  industrial, 
and  commercial  independence,  any  encroachment  would  be  con 
trary  to  a  sound  policy ;  for  every  violation  of  such  a  territorial 
adjustment  would  keep  alive  the  susceptibilities  of  the  injured 
nation  ;  and  the  sacrifices  made  by  the  usurping  power  to  keep 
its  impolitic  acquisitions,  would  far  surpass  the  advantages  it 
could  derive  from  them.  But,  in  our  time,  it  is  vain  even  to 
think  of  a  rational  division  ;  the  subject  is  involved  in,  and  com 
plicated  with  such  various  interests,  as  to  make  it  wholly  imprac 
ticable.  It  is,  however,  not  possible  to  overlook  the  fact,  that  a 
well-shaped  territory  is  one  of  the  first  requisites  of  a  nation ; 
that  the  desire  of  meeting  this  requisite  is  legitimate ;  and  that 
it  may  sometimes  be  the  legitimate  cause  of  war. 

Other  motives  of  antipathy  exist  at  present  among  nations ; 
diversity  of  interests  as  to  manufactures,  commerce,  navigation, 
navies,  colonies  ;  the  want  of  equality  in  civilization,  difference  of 
religion  and  political  rule.  All  these  interests  are  varied  in  a 
thousand  ways  by  questions  of  dynasty  and  power. 

Causes  of  antipathy  are  also  causes  of  sympathy.  The  less 
strong  unite  in  sympathy  against  such  as  are  too  strong ;  the 
oppressed  against  the  oppressor ;  continental  powers  against 
the  maritime  supremacy ;  the  nations  whose  industry  and  com 
merce  are  yet  in  their  infancy  against  such  as  aspire  to 
monopoly ;  the  civilized  against  the  barbarian ;  those  living 
under  monarchy  against  those  whose  government  is  more  or  less 
democratic. 

Nations  seek  satisfaction  of  their  interests  and  their  sympa 
thies,  by  means  of  alliances  among  themselves,  against  opposing 


478  CONTINENTAL    POLICY. 

tendencies  and  interests.  But  as  these  interests  and  tendencies 
cross  each  other  in  different  directions,  alliances  are  precarious. 
Nations  friendly  to-day  may  become  hostile  to-morrow,  and  the 
reverse,  according  as  the  great  interests  or  the  great  principles 
which  divide  them  are  brought  into  question. 

Politics  has  long  tended  toward  equality  of  nations  as 
its  main  object ;  what  is  called  the  maintenance  of  the  Euro 
pean  equilibrium,  has  never  been  any  thing  else  but  the  resist 
ance  of  the  least  powerful  to  the  attacks  of  overwhelming  power. 
Politics,  however,  has  often  confounded  its  immediate  object 
with  its  more  remote  aim,  and  vice  versd. 

The  main  object  of  politics  consists  always  in  clearly  distin 
guishing  which  one  of  the  various  interests  of  the  country 
demands  the  most  imperiously  immediate  satisfaction,  and  until 
this  satisfaction  be  obtained  postpones  and  thrusts  all  other 
questions  aside. 

When  the  dynastic,  monarchical  and  aristocratical  interests 
of  Europe,  forgetting  all  other  question  of  power  and  commerce, 
united  their  strength  against  the  revolutionary  tendencies  of 
1789,  their  policy  was  intelligible. 

It  was  so  too,  when  the  empire  substituted  conquest  for  a  re 
volutionary  propaganda. 

By  his  continental  system,  Napoleon  wished  to  organize  a 
coalition  against  the  maritime  and  commercial  preponderance 
of  England.  To  succeed  in  this,  he  ought  to  have  first  secured 
the  continental  nations  against  the  fear  of  being  conquered  by 
France.  He  failed,  because  among  those  nations  the  terror  of 
his  continental  preponderance  far  exceeded  the  disadvantages 
of  English  maritime  supremacy. 

With  the  fall  of  the  empire  the  great  alliance  ceased  to 
have  an  object.  Since  that  time  the  continental  powers  have 
neither  been  threatened  by  revolutionary  tendencies,  nor  by  the 
conquests  of  France;  on  the  other  hand,  the  superiority  of 
England  in  manufactures,  shipping,  trade,  colonies  and  naval 
power,  increased  immensely  during  the  struggle  against  revo 
lution,  and  conquest.  From  that  time,  it  became  the  interest  of 
the  continental  powers  to  unite  with  France  against  that  com- 


CONTINENTAL    POLICY.  479 

mercial  and  maritime  supremacy.  But  the  fear  inspired  by  the 
skin  of  the  dead  lion  prevented  the  continental  powers  from 
feeling  that  the  living  leopard,  England,  which  had  hitherto 
been  fighting  in  their  own  ranks,  was  now  preying  on  their 
vitals.  The  Holy  Alliance  was  a  political  mistake. 

That  mistake,  however,  found  its  atonement  in  the  revolu 
tion  of  1830.  The  Holy  Alliance  had  needlessly  provoked  a 
power  which  no  longer  existed  —  at  any  rate,  would  not  have  re 
appeared  for  a  long  time.  Happily  for  the  continental  powers, 
Louis  Philip  succeeded  in  abating  in  France  the  revolutionary 
spirit.  France  and  England  concluded  an  alliance ;  France, 
in  the  interest  of  the  dynasty  of  July,  and  of  the  consolidation 
of  the  constitutional  monarchy ;  England,  in  the  interest  of  her 
commercial  supremacy. 

The  Anglo-French  alliance  ceased  to  exist  as  soon  a-s  the  dy 
nasty  of  July  and  the  constitutional  monarchy  in  France  became 
sufficiently  established ;  and  as  soon  as  the  interests  of  France  in 
matters  of  maritime  power,  shipping,  commerce,  industry  and 
foreign  territory,  reappeared  upon  the  foreground.  France  has 
in  these  questions  the  same  interest  as  the  other  continental 
powers ;  and  the  formation  of  a  continental  alliance  against  the 
maritime  preponderance  of  England  may  come  to  be  the  order 
of  the  day,  if  the  dynasty  of  July  succeeds  in  establishing  in 
France  a  perfect  harmony  of  opinion  among  the  various  organs 
of  public  power,  in  laying  out  of  view  the  territorial  questions 
agitated  by  the  revolutionary  spirit,  and  tranquillizing  fully  the 
continental  monarchies  as  to  the  tendencies  of  France  to  agita 
tion  and  conquest. 

The  chief  obstacle  in  our  day  to  a  close  union  of  the  powers 
of  the  European  continent,  is  in  the  fact  that  the  central  por 
tion  does  not  perform  the  part  that  belongs  to  it.  Instead  of 
serving  as  a  medium  between  the  East  and  the  West  in  all 
questions  of  territory,  constitution,  national  independence  and 
power ;  a  mission  with  which  it  is  invested  by  its  geographical 
position ;  by  its  federal  system  excluding  all  fear  of  conquest  on 
the  part  of  neighboring  nations ;  by  its  religious  tolerance  and  its 
cosmopolitical  spirit;  lastly,  by  its  elements  of  civilization; 


480  CONTINENTAL    POLICY. 

this  centre  is  at  present  but  an  apple  of  discord  between  the 
different  sides  of  Europe,  each  of  which  entertains  hopes  of 
drawing  to  its  side  a  weak  power,  because  not  united  and  ever 
uncertain  and  vacillating  in  its  policy.  If  Germany,  with  her 
sea-coast,  with  Holland,  Belgium  and  Switzerland,  would  form  a 
strong  commercial  and  political  union,  if  this  powerful  national 
body  would  reconcile  as  much  as  possible  existing  interests, 
monarchical,  dynastical  and  aristocratical,  with  the  representa 
tive  institutions,  Germany  might  guarantee  a  long  peace  to 
Europe,  and  at  the  same  time  form  the  centre  of  a  durable  con 
tinental  alliance. 

It  is  manifest,  that  as  England  surpasses  immensely  the  other 
maritime  powers,  if  not  in  the  number  of  vessels,  at  least 
in  naval  skill,  the  other  powers  must  of  course  unite  in  order 
to  maintain  an  equilibrium.  Every  one  has  an  interest  in  the 
maintenance  and  in  the  development  of  the  naval  power  of  the 
others ;  and  these  fragments  of  nations,  hitherto  isolated,  and 
without  navies  of  any  strength  or  importance,  should  now  unite 
their  naval  resources.  It  would  be  a  loss  to  France  and  to  the 
American  Union,  as  respects  England,  should  the  Russian  navy 
become  less  efficient — and  vice  vers£.  It  would  be  a  benefit  to  all 
if  Germany,  Holland  and  Belgium,  should  in  common  equip  a 
navy ;  for,  apart,  they  are  at  the  mercy  of  English  supremacy ; 
united,  they  would  constitute  a  formidable  defence  against  that 
supremacy. 

Of  these  maritime  nations  no  one  possesses  either  a  merchant 
marine  out  of  proportion  with  its  external  trade,  nor  a  manu 
facturing  industry  of  a  marked  superiority ;  no  one  of  them  of 
course  has  any  reason  to  fear  the  competition  of  others.  All,  on 
the  other  hand,  have  a  common  interest  in  defending  each  other 
against  the  destructive  competition  of  England;  all  have  a 
common  interest  to  take  from  English  industry,  in  Holland, 
Belgium  and  the  Hanseatic  cities,  those  strong  positions  by  which 
she  has  hitherto  governed  the  continental  market. 

The  commodities  of  the  torrid  zone  being  chiefly  purchased 
with  the  products  of  temperate  climes,  the  consumption  of  the 
former  depending  on  the  market  for  the  latter,  and  every  manu- 


CONTINENTAL    POLICY.  481 

facturing  nation  being  interested  consequently  to  open  and  pro 
secute  its  own  trade  with  tropical  countries,  if  the  manufactur 
ing  nations  of  the  second  rank  should  ascertain  their  own  inte 
rests  and  prosecute  them  earnestly,  the  monopoly  of  the  colo 
nial  or  tropical  trade  would  cease  to  exist.  If,  for  instance, 
England  should  succeed  according  to  her  wishes  in  producing  in 
the  East  Indies  the  tropical  goods  required  for  her  consumption, 
her  trade  with  the  West  Indies  would  be  reduced  to  the  extent 
of  the  market  she  might  find  for  the  West  India  products  re 
ceived  for  her  manufactures.  For  want  of  such  a  market,  her 
possessions  in  the  West  Indies  would  cease  to  be  of  advantage ; 
the  only  alternative  then,  would  be  either  wholly  to  emancipate 
them  or  to  permit  them  to  trade  freely  with  other  manufactur 
ing  countries.  All  manufacturing  and  maritime  nations  of  the 
second  rank  have  a  common  interest  in  adopting  that  policy, 
and  in  mutually  sustaining  each  other ;  no  one  then  can  lose  by 
the  accession  of  Holland  to  the  German  Customs-Union,  nor  by 
close  relations  between  Germany  and  the  Dutch  colonies. 

Since  the  emancipation  of  the  Spanish  and  Portuguese 
colonies  of  South  America  and  the  West  Indies,  it  is  no  longer 
necessary  for  a  nation  to  possess  colonies  in  the  torrid  zone  for 
the  purpose  of  exchanging  manufactured  products  directly  for 
tropical  commodities.  The  markets  of  those  emancipated  colo 
nies  being  free,  any  manufacturing  country  able  to  encounter  the 
competition,  may  enter  into  that  trade.  But  those  tropical 
countries  only  produce  a  large  quantity  of  commodities,  and 
consume  large  quantities  of  manufactured  articles,  when  com 
petency,  morality,  peace,  public  order  and  religious  tolerance, 
are  established  or  acclimated  in  them.  All  the  maritime  nations 
of  the  second  rank,  and  especially  those  having  none  or  insigni 
ficant  colonies,  have  then  a  common  interest  in  improving  their 
condition  even  by  union  of  effort.  The  social  state  of  those 
countries  is  of  much  less  account  to  the  first  commercial 
power ;  it  being  already  or  expecting  to  be  provided  with  tropi 
cal  commodities  from  its  own  closed  and  dependent  markets  in 
the  two  Indies. 

The  important  question  of  slavery  deserves  consideration  also 
31 


482  CONTINENTAL    POLICY. 

from  this  point  of  view.  We  are  not  unwilling  to  admit  that 
there  has  been  much  philanthropy  and  uprightness  in  the  zeal 
shown  by  England  in  their  liberation  of  West  India  slaves  —  a 
zeal  highly  honorable  to  the  British  name.  When  we  regard, 
however,  the  direct  results  of  this  measure,  we  cannot  forbear 
thinking  that  commercial  policy  and  individual  interests  had  a 
large  share  in  it.  What  are  these  results  ?  First,  the  sudden 
emancipation  of  the  negroes,  the  rapid  transition  from  an  infe 
rior  position,  and  almost  bestial  thoughtlessness,  to  a  high 
degree  of  personal  independence,  must  diminish  enormously, 
and  finally  reduce  almost  to  nothing,  the  production  of  tropical 
commodities  in  South  America  and  in  the  West  Indies;  the 
example  of  St.  Domingo,  where,  since  the  expulsion  of  the 
Erench  and  the  Spanish,  production  has  decreased  from  year 
to  year,  and  continues  to  decrease,  is  a  case  with  just 
such  a  result;  secondly,  the  emancipated  negroes  demanding 
high  wages,  while  confining  their  labor  to  the  production  of  the 
most  indispensable  articles,  their  liberty  must  have  its  final  re 
sult  in  idleness  ;  thirdly,  England  possesses  in  the  East  Indies 
the  means  of  supplying  the  whole  world  with  tropical  commodi 
ties.  It  is  known  that  the  Hindoos,  though  laborious  and  in 
dustrious,  are  extremely  abstemious,  in  consequence  of  their 
religious  prohibition  to  use  flesh  as  food.  Add  to  this,  the  want 
of  capital  among  the  natives,  the  great  productiveness  of  the 
soil  in  vegetables,  the  hinderances  to  industry  from  the  system 
of  castes,  and  the  great  competition  in  labor.  The  result  of  all 
this  is,  that  labor  is  incomparably  cheaper  in  the  East  than  in 
the  West  Indies  and  South  America,  whether  in  the  latter  coun 
tries  the  tillage  be  carried  on  by  free  negroes  or  by  slaves  ;  that, 
consequently,  the  production  of  the  East  Indies,  as*  soon  as  their 
internal  trade  is  disencumbered,  and  wise  principles  of  adminis 
tration  prevail,  must  increase  enormously,  so  that  the  time  is  not 
far  distant  when  England  will  draw  from  thence,  not  only  all 
the  colonial  commodities  required  for  her  consumption,  but  also 
immense  quantities  for  consumption  in  other  countries.  By 
diminishing  the  products  of  the  West  Indies  and  South  America, 
whither  other  countries  still  send  manufactured  products,  Eng- 


CONTINENTAL    POLICY.  483 

land  suffers  no  disadvantage ;  she  will,  indeed,  receive  benefit 
from  it,  if  the  demand  for  tropical  commodities  from  the  East 
Indies  increases  greatly  in  markets  supplied  exclusively  with 
her  manufactures.  Fourthly,  it  has  been  maintained,  also,  that 
by  the  emancipation  of  these  slaves  England  desired  to  hold  a 
sword  over  the  heads  of  the  Slave  States  of  North  America ; 
that  the  danger  of  the  Union  may  increase  in  proportion  as 
that  emancipation  gains  ground,  and  awakens  among  the  negroes 
of  those  States  a  desire  for  liberty. 

To  look  more  closely  into  this  subject,  a  philanthropic  experi 
ment,  so  uncertain  in  its  results,  even  for  those  whom  it  was 
intended  to  favor,  appears  anything  but  advantageous  to  nations 
trading  with  South  America  and  the  West  Indies ;  it  is  not 
without  reason,  then,  that  we  ask  these  questions :  Is  not  the 
sudden  transition  from  slavery  to  freedom  more  injurious  to  the 
negroes  themselves  than  a  continuance  in  their  present  condi 
tion  ?  Is  not  a  series  of  generations  necessary  to  train  to  free 
labor,  men  accustomed  to  the  yoke  of  the  brute  ?  Would  it  not 
be  better  to  operate  the  transition  from  slavery  to  freedom  by 
means  of  a  good  system  of  servitude,  securing  to  the  slave  cer 
tain  rights  in  the  ground  he  cultivates,  and  an  equitable  part  in 
the  results  of  his  labor,  the  proprietor  having  ample  authority 
to  compel  the  slave  to  labor,  and  to  regulate  his  conduct  ?  Would 
not  such  a  system  show  better  results  than  the  condition  of  those 
miserable  hordes  of  so-called  free  negroes,  drunken,  idle,  de 
bauched,  begging;  a  condition,  in  comparison  of  which,  Irish 
poverty,  in  its  most  hideous  form,  may  be  regarded  as  comfort 
able  and  civilized  ?  If  it  be  maintained  that  there  is  a  necessity 
laid  upon  the  English  to  raise  every  human  being  to  the  same 
degree  of  liberty  which  they  enjoy  themselves,  —  a  necessity  so 
strong,  so  irresistible,  that  they  are  excusable  for  having  for 
gotten  that  nature  does  not  proceed  by  leaps,  we  would  ask  if 
the  condition  of  the  inferior  castes  of  Hindoostan  is  not  much 
more  miserable  and  abject  than  that  of  the  negroes  of  America  ? 
How  is  it  that  English  philanthropy  has  never  been  moved  in 
favor  of  these  most  unfortunate  of  all  mortals  ?  How  is  it  that 
England  has  not  yet  taken  any  step  in  their  favor,  and  that  she 


484  CONTINENTAL    POLIO  T. 

exerts  herself  to  make  the  utmost  possible  advantage  out  of 
their  distress,  without  any  serious  efforts  for  relief  or  solace  ? 

English  policy  in  the  East  Indies  leads  us  to  the  Eastern 
question.  If  we  pass  over  in  the  politics  of  the  day  all  that 
relates  to  territorial  disputes,  dynastic,  monarchical,  aristocrati- 
cal,  and  religious  interests,  and  to  the  relations  between  cabinets, 
we  cannot  but  see  that  the  continental  powers  have  in  Eastern 
questions  an  interest  at  once  great  and  economical.  Govern 
ments  may,  perhaps,  momentarily  succeed  in  keeping  these  ques 
tions  in  the  back-ground ;  but  they  will  soon  reappear,  claiming 
attention  upon  more  serious  grounds  than  ever.  It  is  a  fact 
long  since  acknowledged  by  reflecting  men,  that  a  country  like 
Turkey,  the  moral,  religious,  social,  and  political  existence  of 
which  is  undermined  on  all  sides,  resembles  a  corpse  which  may 
stand  up  for  a  while  by  the  help  of  the  living,  but  which  is  ne 
vertheless  in  a  state  of  decomposition.  It  is  nearly  the  same 
with  the  Persians  as  with  the  Turks ;  so  also  with  the  Chinese, 
the  Hindoos,  and  with  all  other  Asiatic  nations.  Wherever  the 
decaying  civilisation  of  Asia  begins  to  be  touched  by  the  fresh 
wind  of  Europe,  it  falls  into  dust ;  and  Europe  will  soon  or  late 
be  under  the  necessity  of  taking  all  Asia  under  her  guardian 
ship,  as  England  has  already  done  with  the  East  Indies.  In  all 
this  pell-mell  of  territories  and  populations,  there  is  not  a  single 
nationality  worthy  of  being  regenerated,  or  capable  of  any  pro 
longed  duration.  The  complete  dissolution  of  Asiatic  nations 
seems,  therefore,  unavoidable;  and  the  regeneration  of  Asia 
seems  possible  only  by  the  means  of  an  infusion  of  European 
life,  by  the  gradual  introduction  of  Christianity,  of  our  manners, 
our  culture,  by  European  emigration,  and  the  guardianship  of 
European  governments. 

Reflecting  on  the  course  which  this  regeneration  may  take, 
•we  are  favorably  struck  at  once  by  the  fact  that  the  greatest 
part  of  the  East  is  abundantly  supplied  with  natural  wealth ; 
that  it  is  capable  of  producing  for  the  manufacturing  nations  of 
Europe  large  quantities  of  raw  materials  and  food,  especially 
commodities  of  the  torrid  zone,  thus  opening  an  immense  market 
for  the  products  of  their  manufactures.  It  is  an  indication  of 


CONTINENTAL    POLICY.  485 

nature  that  this  regeneration,  as  well  as  the  culture  of  uncivil 
ized  people  in  general,  must  be  accomplished  by  means  of  a 
large  exchange  of  agricultural  products  for  manufactured  pro 
ducts  ;  European  nations  should,  therefore,  begin  by  admitting 
the  principle  that  no  one  of  them  should  retain  any  exclusive 
commercial  privilege  in  any  part  of  Asia,  that  no  one  should  be 
favored  in  preference  to  others.  To  develop  such  a  trade,  it 
would  be  necessary  to  erect  the  principal  places  of  the  East  into 
free  cities,  in  which  the  European  population  should  have  the 
privilege  of  governing  themselves,  on  condition  of  paying  a 
yearly  tax  to  the  governments  of  the  country. 

Near  these,  in  accordance  with  the  example  of  England  to 
India,  would  be  placed  European  agents,  whose  advice  the  native 
governments  would  be  expected  to  follow  in  what  pertained  to 
public  security,  order,  and  civilization. 

All  the  continental  powers  have  a  common  and  powerful 
motive  to  prevent  the  two  routes,  the  Mediterranean  by  the  Ked 
Sea,  and  that  by  the  Persian  Gulf,  from  becoming  the  exclusive 
possession  of  England;  or  their  remaining  inaccessible  in  the 
hands  of  the  Asiatic  barbarism.  It  is  obvious  that  the  solution 
offering  the  safest  guarantees  to  Europe  would  be  in  making 
Austria  the.  guardian  of  these  important  points. 

All  the  continental  powers,  jointly  with  North  America,  have 
an  equal  interest  in  establishing  the  doctrine  :  "  The  flag  protects 
the  goods ;"  and  that  neutral  powers  are  bound  to  respect  only 
an  actual  and  effective  blockade  of  one  or  another  port,  but  not 
a  single  declaration  of  blockade  against  a  whole  sea-coast. 

Finally,  the  right  of  taking  possession  of  uncultivated  or 
uninhabited  countries,  seems  to  require  some  revision  in  the  in 
terest  of  the  continental  powers.  We  may  smile  in  our  days  at 
the  fact  that  the  Pope  dared  in  former  times  to  give  away 
islands  and  vast  regions,  upon  which  no  subject  of  his  ever  set 
foot ;  nay,  with  a  stroke  of  his  pen,  to  divide  the  globe  into  two 
parts,  giving  one  to  this  man,  another  to  that.  But  is  it  any 
more  reasonable  to  acknowledge  that  the  right  of  property 
in  a  whole  country  belongs  to  him  who  first  takes  possession  of 
a  few  feet  of  the  soil  by  planting  a  pole  adorned  by  a  silk 


486  CONTINENTAL    POLICY. 

flag  ?  It  may  indeed  be  just,  that  for  islands  of  small  extent, 
the  right  of  the  discoverer  should  be  respected ;  but  when  large 
islands  are  in  question,  islands  as  large  as  many  of  the  great 
States  of  Europe,  New  Zealand,  or  Australia,  a  continent  larger 
than  Europe,  no  exclusive  privilege  should  be  recognized  but 
that  of  effective  occupation,  by  means  of  colonization,  and 
only  upon  the  territory  actually  colonized  ;  and  it  is  not  easy  to 
see  upon  what  just  principle  the  Germans  or  the  French  could 
be  denied  the  privilege  of  founding  colonies  on  territory  distant 
from  the  British  establishments. 

If  we  consider  the  importance  of  the  interests  common  to  the 
continental  nations,  in  reference  to  the  first  maritime  power, 
we  acknowledge  that  there  is  nothing  more  necessary  for  them 
than  union,  and  that  nothing  would  be  more  fatal  than  war. 
The  history  of  the  last  century  shows  that  each  war  of  the  con 
tinental  powers  among  themselves  has  helped  to  develop  the 
industry,  the  wealth,  the  navigation,  the  colonial  empire,  and 
the  power  of  Great  Britain. 

It  is  not,  therefore,  to  be  doubted  tkat  Napoleon's  continental 
system  was  based  upon  an  exact  appreciation  of  the  wants  and 
interests  of  the  continent ;  Napoleon,  however,  wished  to  realize 
an  idea  in  itself  just,  by  encroaching  upon  the  independence 
and  the  interests  of  other  continental  powers.  Napoleon's  system 
had  three  great  defects :  First,  it  proposed  to  substitute  for  the 
maritime  supremacy  of  England  the  continental  supremacy  of 
France ;  instead  of  keeping  in  view  the  development  and  the 
equality  of  other  continental  powers,  it  contemplated  their 
humiliation  or  their  dissolution  for  the  benefit  of  France.  He 
closed  France  to  the  other  continental  powers  when  France  was 
claiming  free  competition  in  their  markets.  Finally,  having 
destroyed  almost  entirely  the  trade  between  the  manufacturing 
countries  of  Europe  and  the  tropical  countries,  he  was  obliged 
to  replace  artificially  the  products  of  those  countries. 

The  idea  of  a  continental  system  will  never  be  given  up ;  the 
necessity  of  its  realization  will  be  the  more  felt  by  the  conti 
nental  nations  as  England's  industry,  wealth  and  power  increase. 
This  is  evident  in  our  day,  and  will  become  more  so,  as  time 


CONTINENTAL    POLICY.  487 

progresses.  But  it  is  not  less  certain  that  no  continental  alli 
ance  can  be  successful  until  France  shall  be  willing  to  avoid 
Napoleon's  errors. 

It  is  unwise,  then,  on  the  part  of  France  to  annoy  Germany 
with  questions  of  boundaries,  making  claims  unfounded  in  law 
and  in  the  nature  of  things,  thus  compelling  other  continental 
nations  to  adhere  to  England. 

It  is  folly  on  her  part  to  speak  of  the  Mediterranean  as  of  a 
French  lake,  and  to  aspire  to  an  exclusive  influence  in  the  East 
and  in  South  America. 

An  efficacious  continental  system  can  proceed  only  from  the 
free  association  of  the  continental  powers,  and  can  succeed  only 
upon  the  condition  of  an  equal  participation  in  all  advantages 
that  are  to  result  from  it.  In  this  way,  and  not  otherwise,  can 
the  maritime  powers  of  the  second  rank,  without  resorting  to 
arms,  make  themselves  so  respected  by  England,  as  to  induce 
her  to  listen  to  their  legitimate  pretensions.  It  is  only  by 
means  of  such  an  alliance  that  the  manufacturing  nations  of  the 
continent  can  preserve  their  relations  with  countries  of  the  torrid 
zone,  and  at  the  same  time  defend  their  interests  in  the  East 
and  the  West. 

It  may  undoubtedly  be  painful  to  the  English,  greedy  of 
supremacy,  to  see  the  continental  nations  developing  by  mutual 
commercial  facilities  their  manufacturing  industry,  strengthen 
ing  their  merchant  marine  and  their  naval  power,  seeking  parti 
cipation  everywhere  in  the  culture  and  colonization  of  barbarian 
and  uncultivated  countries,  enjoying  full  commerce  with  the 
torrid  zone,  and  thus  reaping  their  rightful  portion  of  the  ad 
vantages  which  nature  has  bestowed  on  them ;  but  a  glance  at 
the  future  may  console  them  for  their  supposed  losses  and  the 
good  fortune  of  their  rivals. 

The  very  same  causes,  indeed,  to  which  England  owes  her 
present  elevation,  will  raise  America,  probably  in  the  course  of 
the  next  century,  to  a  degree  of  industry,  wealth,  and  power, 
which  will  place  her  as  far  above  England,  as  England  is  now 
above  Holland.  By  the  force  of  events,  the  United  States  will, 
in  the  meanwhile,  have  attained  to  a  population  of  a  hundred 


488  COMMERCIAL    POLICY. 

millions ;  they  will  extend  their  population,  their  constitu 
tion,  their  culture,  and  their  spirit,  over  all  Central  and  South 
America,  as  they  have  recently  extended  them  over  the  border 
provinces  of  Mexico ;  the  federal  bond  will  unite  all  those  im 
mense  countries ;  a  population  of  several  hundred  millions  of 
souls  will  develop  the  power  and  resources  of  a  continent,  the 
extent  and  the  natural  wealth  of  which  vastly  exceed  those  of 
Europe ;  and  the  maritime  power  of  the  Western  World  will 
then  exceed  that  of  Great  Britain  in  the  same  proportion  as  its 
sea-coast  and  its  rivers  surpass  the  sea-coast  and  the  rivers  of 
England  in  size  and  grandeur. 

At  no  very  distant  period,  then,  the  same  necessity  which 
now  urges  the  French  and  the  Germans  to  establish  a  continental 
alliance  against  British  supremacy,  will  make  it  necessary  for 
the  English  to  organize  an  European  coalition  against  the  supre 
macy  of  America.  Great  Britain  will  then  seek  and  find  in  the 
control  of  the  united  European  powers,  her  security  against  the 
preponderance  of  America,  and  an  indemnity  for  her  lost  su 
premacy. 

England  will  act  wisely  if  she  accustoms  herself  in  good 
time  to  the  idea  of  resigning  her  supremacy ;  and  if  she  se 
cures,  by  timely  concessions,  the  friendship  of  the  European 
powers,  among  whom  she  must  soon  be  content  to  hold  the  place 
of  first  among  equals. 


CHAPTER  IV. 
COMMERCIAL   POLICY  OF   GERMANY. 

IF  there  be  any  country  destined  to  manufacturing  industry, 
it  is  undoubtedly  Germany.  The  high  rank  she  occupies  in 
science,  in  the  fine  arts,  and  in  literature,  as  well  as  in  reference 
to  education,  public  administration,  and  institutions  of  public 
.utility ;  her  moral  and  religious  sense,  her  love  of  labor  and 
economy,  her  dogged  perseverance,  her  inventive  genius,  her 


COMMERCIAL    POLICY    OF    GERMAN Tl  489 

great  and  powerful  population,  the  extent  and  the  nature  of  her 
tera-itory,  the  development  of  her  agriculture,  her  national, 
social,  and  intellectual  resources,  all  these  circumstances,  and 
many  more,  indicate  her  special  vocation  to  manufacturing 
industry. 

If  any  country  has  a  right  to  expect  from  the  protective 
system,  appropriate  to  its  position,  advantageous  results  in  the 
development  of  its  manufactures,  in  the  increase  of  its  foreign 
trade  and  shipping,  for  the  improvement  of  its  ways  of  commu 
nication,  in  the  prosperity  of  its  agriculture,  as  well  as  in  the' 
consolidation  of  its  power,  in  the  guarantees  of  its  independence, 
and  in  the  increase  of  its  influence  abroad,  that  country  is 
Germany. 

We  fear  not  to  affirm  that  on  the  perfecting  of  the  protective 
system  depends  the  active  life,  the  independence,  and  the  dura 
tion  of  German  nationality.  The  national  mind  cannot  take 
deep  root,  cannot  bear  beautiful  flowers  and  abundant  fruits, 
but  on  the  soil  of  general  competency.  From  the  unity  of 
material  interests  only  can  moral  unity  issue ;  from  both  united, 
flow  the  power  of  the  nation.  What  signifies  all  our  efforts, 
whatever  we  may  be,  governors  or  governed,  nobles,  citizens, 
learned  or  illiterate,  men  of  war,  or  men  of  state,  manufac 
turers,  agriculturists,  or  tradesmen,  if  we  have  no  nationality ; 
if  we  want  a  security  for  the  duration  of  our  nationality  ? 

But  the  German  protective  system  will  have  but  imperfectly 
performed  its  mission,  so  long  as  the  thread  of  cotton  and  flax 
which  Germany  uses  or  weaves  shall  not  be  of  her  own  spinning ; 
so  long  as  she  imports  not  directly  the  tropical  commodities  she 
consumes,  paying  for  them  with  the  productions  of  her  own  manu 
factories  ;  so  long  as  she  shall  not  accomplish  all  this  by  the  aid 
of  her  own  ships,  making  her  flag  everywhere  respected ;  so 
long  as  she  shall  not  possess  a  complete  system  of  internal  com 
munications,  by  rivers,  canals,  and  rail-roads ;  so  long  as  the 
Customs-Union  shall  not  extend  to  her  whole  sea-coast,  as  well  as 
to  Holland  and  Belgium.  We  have  treated  these  subjects  in 
different  parts  of  this  work:  it  is  enough,  merely  to  refer  to 
them  in  this  place. 


490  COMMERCIAL    POLICY. 

When  we  import  raw  cotton  from  Egypt,  Brazil,  or  the  United 
States,  we  pay  for  it  with  the  products  of  our  own  manufactures  ; 
when  we  import  cotton-yarn  from  England,  we  give  in  exchange, 
raw  materials  and  commodities,  which  we  might  with  more  pro 
fit,  work  up  or  consume  ourselves ;  or  in  the  precious  metals  we 
receive  elsewhere,  and  which  might  be  used  to  purchasea  broad 
raw  materials  for  our  own  industry,  and  tropical  goods  for  our 
own  consumption,  or  to  be  sold  to  others. 

So,  also,  the  extension  and  improvement  of  the  art  of  spinning 
flax  by  machinery  will  not  only  augment  our  consumption  of 
linens,  and  improve  our  agriculture,  but  also  increase  immensely 
our  relations  with  tropical  countries. 

As  to  the  spinning  of  cotton  and  flax,  as  also  to  the  woollen 
manufacture,  we  are,  with  our  unemployed  water-power,  with 
our  low  prices  of  food,  as  well  prepared  as  any  other  country ; 
we  only  need  security  for  our  capitalists,  against  the  loss  of 
time,  means  and  money ;  and  for  our  mechanics,  against  the  loss 
of  their  industry  by  sudden  changes  of  policy,  ending  for  them 
in  pauperism.  A  moderate  duty  that  would  be  increased  in  the 
course  of  the  five  ensuing  years  to  about  twenty-five  per  cent., 
maintaining  this  rate  for  several  years,  and  falling  afterwards 
gradually  to  fifteen  or  twenty  per  cent.,  would  suffice  for  the 
purpose  of  this  security.  All  that  has  been  urged  by  the  parti 
sans  of  the  theory  of  value,  (the  School),  against  such  a  mea 
sure,  has  been  refuted  by  us.  In  favor  of  our  positions,  it 
may  be  further  urged,  that  great  industries,  like  those,  afford 
the  means  of  founding  on  a  large  scale  the  manufacture  of 
machinery  and  steam-engines,  and  of  forming  a  class  of  skilful 
men,  well  versed  in  the  industrial  arts. 

As  to  the  purchase  of  tropical  commodities,  Germany,  as  well 
as  France  and  England,  must  adopt  the  principle  of  giving  a  pre 
ference  to  those  countries  of  the  torrid  zone  which  take  our 
manufactured  articles ;  in  a  word,  we  must  buy  from  those  who 
buy  from  us.  The  same  must  be  our  rule  in  our  relations  with 
the  West  Indies  and  both  Americas. 

But  it  is  otherwise  with  Holland,  which  furnishes  us  enormous 


COMMERCIAL    POLICY    OP    GERMANY.  491 

quantities  of  her  colonial  products,  and  takes  from  us  in  exchange 
but  small  quantities  of  manufactured  articles. 

Holland,  indeed,  finds  in  Germany  a  market  for  the  greatest 
part  of  her  colonial  goods;  for  England  and  France,  being 
chiefly  supplied  by  their  own  colonies,  or  by  dependent  coun 
tries,  colonies  and  countries  whose  consumption  of  manufac 
tures  is  exclusively  furnished  by  them,  can  afford  but  a  restricted 
market  for  such  colonial  commodities. 

Holland  possesses  no  great  manufacturing  industry,  but  her 
colonial  production  has  increased  immensely  during  late  years, 
and  its  increase  must  be  still  more  immense  in  coming  years. 
Her  policy  towards  Germany  is  unfriendly  and  in  disregard  of  her 
true  interests  ;  finding  in  Germany  a  market  for  the  larger  por 
tion  of  her  colonial  productions,  she  selects  her  supply  of  manu 
factured  products  elsewhere,  at  her  pleasure.  This  is  short 
sighted  policy,  the  advantages  of  which  are  but  apparent ;  for 
if  Holland  should  give  the  preference  to  the  products  of  the 
German  manufactories  at  home  and  in  her  colonies,  the  German 
demand  for  Dutch  colonial  goods  would  increase  in  proportion 
to  the  sale  of  German  manufactured  goods  to  Holland  and  her 
colonies.  These  relations  of  exchange  are  disturbed  by  the 
policy  of  Holland,  in  selling  her  colonial  products  to  Germany, 
and  importing  her  supply  of  manufactured  goods  from  England ; 
whilst  England,  however  extensive  the  market  she  finds  in  Hol 
land  for  her  manufactures,  receives  always  from  her  colonies 
and  subject  countries  almost  her  entire  supply  of  colonial 
products. 

The  interest  of  Germany  demands,  therefore,  the  advantage 
of  a  differential  duty  in  favor  of  her  manufactures,  securing  the 
exclusive  supply  of  Holland  and  her  colonies,  or,  in  case  of  a 
refusal  by  Holland,  the  establishment  of  a  differential  duty, 
favoring  the  importation  of  the  productions  of  Central  and  South 
America,  as  well  as  of  the  free  markets  of  the  West  Indies. 

This  last  measure  would  be  the  most  effectual  mode  of  inducing 
Holland  to  enter  the  Zoll-verein,  the  Germanic  industrial  and 
commercial  confederacy. 


492  COMMERCIAL    POLICY. 

In  the  actual  state  of  things,  Germany  has  no  motive  to  sac 
rifice  her  manufactures  of  beet  sugar  to  the  trade  with  Holland. 
When  Germany  can  pay  for  the  luxuries  she  needs  in  her  manu 
factures,  it  will  he  more  for  her  advantage  to  procure  them  by 
way  of  exchange  with  the  countries  of  the  torrid  zone,  than  to 
produce  them  at  home. 

Germany  should,  of  course,  be  now  chiefly  occupied  with  the 
idea  of  extending  her  trade  with  both  Americas  and  with  the 
free  islands  of  the  West  Indies.  For  this  purpose,  besides  other 
measures,  already  indicated,  the  following  may  be  worthy  of 
attention :  the  establishment  of  regular  steam  navigation  between 
the  German  maritime  cities  and  the  principal  ports  of  those 
countries ;  the  encouragement  of  emigration  to  those  places ;  the 
strengthening  of  friendly  relations  between  them  and  the  Cus 
toms-Union,  and  the  promotion  of  their  civilization. 

The  experience  of  late  years  has  abundantly  taught  what  an 
immense  impulse  regular  steam  navigation  gives  to  commerce  at 
large.  France  and  Belgium  are  following  already  in  the  foot 
steps  of  England  in  this  respect,  very  well  assured  that  any 
country  remaining  behind  in  these  means  of  communication  must 
necessarily  fall  behind  in  her  foreign  trade.  The  maritime 
places  of  Germany  understand  this  perfectly ;  a  company  has 
been  formed  in  Bremen  for  the  building  of  several  steamers 
intended  for  the  trade  of  North  America.  But  this  is  not  suffi 
cient.  The  commercial  interests  of  Germany  require  regular 
trade  by  steamers,  not  only  with  North  America,  and  particularly 
with  New  York,  Boston,  Charleston,  and  New  Orleans,  but  also 
with  Cuba,  St.  Domingo,  Central  and  South  America.  In  this 
mode  of  communication  Germany  should  be  second  to  none. 
We  cannot  indeed  but  admit  that  the  means  necessary  for  this 
object  exceed  the  resources  of  the  maritime  places  of  Germany, 
and  we  incline  to  believe  that  the  execution  of  these  enterprises 
is  only  possible  by  the  aid  of  large  appropriations  from  the  trea 
sury  of  the  States  of  the  Zoll-verein.  The  prospect  of  such 
assistance,  as  well  as  of  a  differential  duty  in  favor  of  German 
navigation,  would  be  for  those  places  a  powerful  motive  for  join- 


COMMERCIAL    POLICY    OF    GERMANY.  493 

i 

ing  the  Customs-Union.  If  we  consider  the  increased  exporta 
tion  of  manufactured  products  and  the  increased  importation  of 
tropical  commodities,  and,  of  course,  the  increased  receipts  into 
the  treasury  of  the  Customs-Union,  we  cannot  but  acknowledge 
that  a  considerable  expense  might  justly  be  incurred  for  this 
end,  and  that  large  profits  might  be  anticipated  from  such  an 
investment. 

Facility  of  communication  with  those  countries  would  greatly 
encourage  the  emigration  of  Germans  to  those  regions,  and  this 
emigration  would  be  an  excellent  basis  of  the  future  extension 
of  our  trade  with  them.  For  that  purpose  the  States  of  the 
Customs-Union  should  appoint  consuls  and  agents  for  those 
regions,  'to  encourage  German  establishments  and  enterprises, 
and  otherwise  aid  those  countries  in  whatever  regards  their 
political  institutions  and  their  social  condition. 

We  are  far  from  sharing  in  the  opinion  that  the  American 
countries  situated  within  the  tropics  are  less  advantageous 
for  German  colonization  than  the  temperate  climate  of  North 
America.  However  prepossessed,  as  we  confess  we  are,  in  favor 
of  the  latter  country,  and  without  being  able  or  willing  to  deny 
that  the  Western  portion  of  the  United  States  offers  to  an  iso 
lated  German  emigrant,  with  some  capital,  the  best  of  chances 
of  making  himself  a  comfortable  home,  we  must,  nevertheless, 
declare  here,  that  in  a  national  view,  emigration  to  Central  and 
South  .America,  well  conducted,  and  carried  on  upon  a  large 
scale,  would  procure  to  Germany  far  greater  advantages.  What 
benefit  does  Germany  derive  from  the  good  fortune  of  her 
emigrants  to  the  United  States  if  they  are  lost  forever  to  her, 
and  if  she  can  anticipate  from  their  labor  no  results  specially 
beneficial  to  her  ?  It  is  a  delusion  to  believe  that  the  German 
language  will  be  preserved  among  the  Germans  settled  in  the 
United  States ;  or,  that  in  the  course  of  time,  German  States 
will  be  formed  there ;  we  formerly  partook  of  that  error,  but 
after  ten  years  of  observations  on  the  very  spot,  we  arrived  at 
an  entirely  different  opinion.  Assimilation,  as  well  in  regard  to 
language  and  literature,  as  to  administration  and  laws,  is  in  the 


494  COMMERCIAL    POLICY. 

genius  of  every  nationality ;  it  must  be  so ;  and  it  is  a  special 
characteristic  of  North  America.  Whatever  be  now  the  number 
of  the  Germans  residing  in  the  United  States,  there  is  not  one 
whose  great-grandsons  will  not  prefer  the  English  to  the  Ger 
man  language,  and  this  for  the  simple  reason  that  the  former  in 
the  United  States  is  the  language  of  learned  men,  of  literature, 
of  the  laws,  of  the  government,  of  the  courts,  of  trade,  of  indus 
try,  of  social  intercourse.  It  must  necessarily  be  with  the  Ger 
mans  in  the  United  States  as  with  the  Huguenots  in  Germany, 
and  with  the  French  in  Louisiana  —  they  will  melt  by  force  of 
circumstances  into  the  dominant  population,  some  sooner,  some 
later,  according  to  the  position  they  occupy  with  reference  to 
the  other  population. 

Germany  has  still  less  ground  to  look  for  an  active  or  benefi 
cial  intercourse  with  such  of  her  children  as  are  established  in 
the  west  of  the  United  States.  The  first  colonist  is  obliged  to 
manufacture  the  greatest  part  of  his  own  dress  and  furniture ; 
and  these  habits  of  self-dependence  are  'transmitted  frequently 
to  the  second  and  third  generation.  Add  to  this  that  North 
America  is  making  rapid  and  energetic  strides  in  manufacturing 
industry,  and  will  soon  reach  the  point  of  furnishing  a  sufficiency 
for  home  consumption. 

We  do  not  mean  to  say,  however,  that  the  American  market 
has  no  great  importance  for  the  manufactures  of  Germany.  On 
the  contrary,  in  our  opinion,  the  United  States  is  one  of  our 
most  important  markets  for  various  objects  of  luxury  and  articles 
of  easy  transport,  in  which  hand-labor  is  the  principal  element 
of  the  cost. 

In  what  regards  this  kind  of  merchandise,  its  importance  for 
Germany  will  increase  constantly  every  year.  What  we  mean 
to  assert  is,  that  the  Germans  who  settle  in  the  western  part 
of  North  America  will  not  contribute  perceptibly  to  any  in 
creased  demand  for  German  manufactures,  and  that  in  this  re 
gard,  emigration  to  Central  and  South  America  deserves  and 
needs  much  more  encouragement. 

The  last  named  countries  are  especially  destined  to  produce 
tropical  commodities ;  they  will  never  make  progress  in  maim- 


COMMERCIAL    POLICY    OF    GERMANY.  495 

facturing  industry.  There  is  found  a  new  and  fresh  market  to 
contend  for  —  those  who  now  establish  there  the  firmest  trade, 
will  retain  it  for  ever.  Destitute  of  the  moral  energy  neces 
sary  for  reaching  a  higher  degree  of  culture,  for  establishing 
regular  and  solid  governments,  those  countries  will  increasingly 
perceive  the  necessity  of  assistance  from  abroad,  in  the  way 
of  immigration.  The  English  and  French  are  hated  for  their 
arrogance,  by  people  jealous  of  their  national  independence; 
the  Germans  are  loved  there  from  the  opposite  feeling.  The 
States  of  the  Customs-Union  ought  therefore  to  give  due 
attention  to  that  part  of  the  world. 

A  good  system  of  German  consular  and  diplomatic  agents  in 
mutual  correspondence  should  be  organized  there.  Young 
naturalists  ought  to  be  encouraged  to  traverse  those  countries, 
and  help  to  make  them  known  by  impartial  reports :  young 
tradesmen  to  explore  them ;  young  physicians  to  give  the  benefit 
of  their  skill  and  influence.  Companies  should  be  organized, 
specially  and  adequately  sustained  and  protected,  which  should 
establish  themselves  in  maritime  places,  purchase  large  tracts  of 
land  in  those  regions,  and  prepare  them  for  colonization  by 
Germans.  Associations  for  commerce  and  navigation  ought  to 
be  formed  with  the  view  of  opening  new  markets  to  the  products 
of  German  manufactories,  and  of  organizing  new  lines  of 
steamers ;  mining  companies  should  avail  themselves  of  German 
skill  and  labor  in  working  mines  and  developing  mineral  wealth. 
The  associated  States  ought  in  every  way  to  conciliate  the 
good-will  of  the  people,  and  especially  of  governments,  and  to 
employ  it  efficiently  in  promotion  of  the  general  security,  the 
improvement  of  ways  of  communication  and  public  order. 
They  ought,  even  if  this  were  a  mode  of  securing  the  favor  of 
those  governments,  to  assist  them  by  sending,  when  needful, 
auxiliary  troops. 

The  same  policy  ought  to  be  pursued  with  regard  to  the  East, 
to  European  Turkey,  and  to  the  countries  of  the  Lower  Danube. 
Germany  has  an  immense  interest  in  seeing  public  security  and 
good  order  prevail  in  those  countries;  the  emigration  which 
would  take  that  direction  would  be  the  easiest  for  individuals, 


496  COMMERCIAL      POLICY. 

and  the  most  advantageous  for  the  mother  country.  With  five 
times  less  money  and  time  than  it  requires  to  reach  Lake  Erie, 
an  inhabitant  of  the  Upper  Danube  can  be  transported  into 
Moldavia,  Wallachia,  Servia,  or  to  the  south-west  coast  of  the 
Black  Sea.  What  attracts  him  in  preference  to  the  United 
States,  is  the  high  degree  of  liberty,  security,  and  tranquillity 
he  enjoys  there.  But,  in  the  present  state  of  Turkey,  it  would 
not  be  impossible  for  the  German  States,  together  with  Austria, 
to  accomplish,  in  the  social  condition  of  that  country,  such  im 
provements  as  would  put  an  end  to  the  repugnance  of  German 
colonists,  especially  if  the  German  governments  would  organize 
companies  for  colonization,  would  participate  in  them,  and  lend 
them  a  steady  support. 

It  is  obvious  that  such  colonies  would  be  advantageous  to 
the  industry  of  the  associated  German  States,  only  so  far  as  the 
exchange  of  their  manufactures  for  the  agricultural  products 
of  the  colonists  would  meet  no  obstacle,  and  would  be  sufficiently 
facilitated  by  economical  and  rapid  modes  of  transportation.  It 
is,  therefore,  for  the  best  interests  of  the  associated  States,  that 
Austria  should  facilitate  as  much  as  possible  the  transit  trade  on 
the  Danube,  that  steam  navigation  upon  that  river  should  become 
active,  and  that  for  this  purpose  it  should  be  in  the  beginning 
vigorously  supported  by  the  governments. 

But  nothing  would  be  more  desirable,  than  to  see  the 
Customs-Union  and  Austria  making  mutual  concessions  to  their 
respective  manufactures ;  and  this  may  occur  when  the  associated 
States  have  more  nearly  approximated  Austrian  industry. 

After  the  conclusion  of  a  treaty  on  this  basis,  Austria  would 
have  with  the  States  of  the  Customs-Union  a  common  interest 
in  making  what  advantage  they  can  out  of  the  trade  with  Turkish 
provinces,  for  the  benefit  of  their  manufactures,  and  their  ex 
ternal  commerce. 

In  the  expectation  that  the  Hanseatic  cities  and  Holland,  will 
accede  to  the  Customs-Union,  it  would  be  desirable  that  Prussia, 
taking  the  initiative,  should  cover  the  German  trade  with  a  flag, 
and  lay  the  foundation  of  a  German  fleet,  and  occupy  herself 


COMMERCIAL    POLICY    OF    GERMAN  T.  497 

also  with  plans  for  German  colonies  in  Austria,  in  New  Zea 
land,  or  in  some  other  islands  of  the  new  continent. 

The  means  of  meeting  the  expenditure  incurred  in  these  at 
tempts,  and  the  public  appropriation  recommended  hy  us,  should 
be  taken  from  the  same  sources  whence  England  and  France 
derive  their  ability  to  aid  their  foreign  trade  and  their  colonies, 
and  to  maintain  powerful  fleets ;  that  is,  from  the  proceeds 
of  duties  upon  tropical  commodities.  In  order  to  insure  unity, 
order,  and  energy  in  these  revenue  operations,  the  States  of  the 
Customs-Union  might  confide  to  Prussia  their  direction  as  to  the 
North  and  the  transatlantic  trade ;  and  to  Bavaria  as  to  the 
Danube  and  the  relations  with  the  East.  An  additional  import 
duty  of  ten  per  cent,  upon  manufactured  goods,  and  upon  colo 
nial  goods,  would  yield  several  millions  of  francs  yearly,  as  the 
continued  increase  of  the  exports  of  our  manufactured  goods 
must  have  the  effect  of  doubling,  or  even  of  tripling  in  the 
course  of  time,  the  consumption  of  tropical  commodities,  in  the 
States  of  the  Customs-Union ;  the  receipts  from  customs  must 
also  increase  in  the  same  proportion.  The  associated  States 
might  thus  suitably  provide  for  the  joint  expenditure,  if  they 
should  decide  that  independently  of  the  ten  per  cent,  of  additi 
onal  duty,  a  portion  of  the  further  increase  of  the  revenue  from 
customs  should  be  put  at  the  disposition  of  the  Prussian 
government,  to  be  appropriated  to  the  use  just  mentioned. 

As  to  the  establishment  of  a  national  system  of  routes  for 
travel  and  transportation,  and  particularly,  of  rail-roads,  we 
refer  to  a  special  work  we  have  recently  published  on  that 
subject.  These  grand  improvements  defray  their  own  expenses, 
and  all  that  is  to  be  claimed  from  government  in  their  behalf, 
may  be  reduced  to  a  single  word,  "Energy," 


THE    END. 


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